Hong Kong prices second green bond, becoming a key sustainable finance issuer in Asia
Following its first issuance in May 2019, the Government of the Hong Kong Special Administrative Region (HKSAR) successfully priced its second issuance of 144A/Reg S multi-tranche US$2.5bn green bonds under the Government Green Bond Programme. Such green bonds were also priced under the newly-established Global Medium Term Note (GMTN) Programme dedicated to green bond issuances restricting the Use of Proceeds only to “Eligible Categories” of the Government’s Green Bond Framework published in 2019.
The offering is comprised of a US$1bn 5-year, a US$1bn 10-year and a US$500m 30-year green bonds, allowing the HKSAR Government to establish a comprehensive benchmark curve for potential issuers in Hong Kong and the region. The issuance was also the first 30-year green bond issued by an Asian government.
The green bonds were well received by conventional and green investors with an oversubscription of 5 times on the 5 and 10-year, and 7 times on the 30-year tenor and were allocated to international institutional investors from Asia, Europe and the US.
Crédit Agricole CIB supported the issuance as a Joint Global Coordinator, a Joint Lead Manager, a Joint Bookrunner and a Joint Green Structuring Bank.
"On the back of the strong commitment to promote, develop and establish Hong Kong SAR as a global Green finance hub, the Government successfully issued its US$2.5bn Green bond in three tranches building a comprehensive benchmark curve for potential issuers in Hong Kong and the region. The transaction was conducted as a drawdown under the newly established GMTN Programme, which is the world’s first government MTN Programme dedicated to green bond issuances.
Crédit Agricole CIB is honoured to once again contribute to HKSAR Government’s roaring return to the Green bond market and to be part of its many market milestones by acting as Joint Global Coordinator and Joint Green Structuring Advisor.
As expected, the transaction attracted strong participation from a diverse group of conventional and green investors and the deal was multiple times oversubscribed. Notably, we saw a strong preference of European and US investors for longer-tenor green bonds, with a combined allocation of half of the 30-year tranche. Furthermore, and apart from the critical green element of this trade, the success of the transaction underscores the global investor confidence in Hong Kong’s credit strengths and economic fundamentals in the long term.”
Christophe Crétot, Head of Debt Origination and Advisory for Asia-Pacific
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