Hong Kong Mortgage Corporation issues Asia's largest social bond

This second social bond issuance for the HKMC, equivalent to over US$2.5 billion and comprising HK$9.5 billion 2-year, CNH 5 billion 3-year and US$650 million 5-year tranches, marks the largest social bond issuance in Asia. The HKD and CNH tranches are the largest social bond issuances in HKD and CNH respectively. The USD tranche also marks HKMC’s return to the public USD bond market since 2009. In addition, it is the first time for a Hong Kong bond issuer to launch HKD, CNH and USD tranches concurrently.  

In spite of the rising financial market volatilities, the issuance was well received by a diverse group of high-quality local and overseas institutional investors. It demonstrates investors’ strong demand for financial instruments that are contributing to desired social outcomes. This transaction also reinforces Hong Kong’s roles as an offshore Renminbi business centre and the Asian hub for arranging international green and sustainable bonds. 

Similar to the HKMC’s first social bond issuance, the net proceeds will mainly be used to finance or refinance the loans under the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme, which was launched in April 2020 to alleviate the cash flow pressure of small and medium-sized enterprises (SMEs) in Hong Kong during the pandemic, helping to minimise business shut-downs and layoffs. The social bonds and the use of their proceeds are governed by the HKMC’s Social, Green and Sustainability (SGS) Financing Framework, which Crédit Agricole CIB supported the establishment, with a Second Party Opinion provided by Sustainalytics. 

Crédit Agricole CIB acted as one of the two Joint SGS Structuring Banks, as well as a Joint Global Coordinator, Joint Lead Manager and Joint Bookrunner on this social bond issuance.

The HKMC is a wholly owned subsidiary of the Exchange Fund managed by the Hong Kong Monetary Authority (HKMA), Hong Kong’s de facto central bank. Crédit Agricole CIB is privileged to have also supported Hong Kong Government’s institutional green bond issuances since 2019, totaling about US$19 billion equivalent, and to contribute to its development as a green and sustainable finance centre and a reference for sustainability in the region and globally.