Hong Kong government raises US$3.2 billion via multicurrency green bond

The offering attracted participation from a wide spectrum of investors globally, such as central banks, sovereign wealth funds, private banks, and insurance firms. It drew more than HK$120 billion equivalent in orders, according to a statement from Hong Kong’s facto central bank.

The debut issuance of 20-year and 30-year green bonds denominated in yuan also marks a “significant milestone” in the city’s sustainable bond programme, according to HSBC, one of the lead managers of the deal.

“Hong Kong has not only extended the [offshore yuan] yield curve, but also become the first issuer other than China’s Ministry of Finance to publicly offer 20-year and 30-year [offshore yuan] bonds,” said Eugene Ng, managing director of debt capital markets and investment banking at HSBC Asia-Pacific.

“This pioneering move supports the liquidity in the longer part of [offshore yuan] curve and has established a new benchmark for other issuers to emulate.”

Proceeds raised will be used to finance or refinance projects that provide environmental benefits and support sustainable development, the HKMA said.

The city’s climate goal is to halve carbon emissions by 2035 and reach net zero by 2050.

“With these multicurrency issuances, the intended use of proceeds focus largely on future green infrastructure for the inclusive green growth of the city,” said Chaoni Huang, head of sustainable capital markets for Asia-Pacific at BNP Paribas. “Hong Kong itself also cemented its leadership position as a regional green finance hub.”