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HK latest triple tranche Green Bond oversubscribed 5X!

Hong Kong has raised almost USD6 billion through a triple-currency green bond offering consisting of eight tranches with tenors ranging from 2 to 30 years, denominated in US dollars (USD), euro (EUR) and Renminbi (RMB).

Marking the largest issuance to date since the first government green bonds were issued in 2019, the Monetary Authority said the issuance was five times oversubscribed, with US$30 billion worth of orders placed.

The total amount of US dollar bonds issued is US$2.25 billion, with a maturity ranging from three to 10 years, and yields ranging from 4.34 percent to 4.04 percent.

The total Euro bonds issued is €1.5 billion, with a four-year and nine-year maturity, and yields ranging from 3.41 percent to 3.85 percent.

The total amount of RMB bonds issued is 15 billion yuan, which is 50 percent more than the green bonds issued in January this year.

The maturity ranges from two to 10 years, with yields ranging from 2.7 percent to 3.3 percent.

 “The offering has included our first 10-year RMB green bond, which helps to extend the offshore RMB yield curve and continues to enrich offshore RMB product offerings, promoting RMB internationalisation in an orderly manner,” according to Hong Kong’s Financial Secretary Paul Chan.

Proceeds raised will be credited to the Capital Works Reserve Fund to finance or refinance projects that provide environmental benefits and support the sustainable development of Hong Kong.

Following the publishing of the Green Bond Framework in March 2019, it was updated in February 2022, to better reflect the Government’s latest climate commitments and strategy and aligning with the latest international standards and practices in the green bond market.

The triple-currency offering is the largest ESG bond issuance in Asia to date and the HKSAR Government has also set a significant benchmark as the first government issuer in the region to issue green bonds in three currencies concurrently.

The fact that the issuance was 5 times oversubscribed demonstrates the appetite that investors have for green bonds in the current financial climate. Let’s hope the market will further develop and deepen.