- Hong Kong has committed to a five-fold increase in green bond issuance in the next five years
- Investors have shown strong demand for previous issuances
- Hong Kong has sold US$7.2 billion in sovereign green bonds across different currencies since 2019
Hong Kong aims to raise up to the equivalent of $5 billion in a dollar, euro and offshore Chinese yuan green bond issuance, sources with direct knowledge of the matter said.
The final size and tenors for the issuance could change, depending on investors’ appetite, the sources said.
The government made no immediate response to a request for comment. The sources declined to be named, as the information had not been made public.
Hong Kong’s government was proposing that the dollar tranche could be spread across three-, five- and 10-year tranches, with a possibility of issuing a 30-year bond, two sources told Reuters.
Hong Kong was aiming to raise about $3 billion in dollars, those two sources said.
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Image: Hong Kong. Source: Andrea G. / Pixabay
The euro tranche was targeting 1 billion euros in two- and seven-year tenors, they added.
The offshore-yuan-deal was intended to be worth about 5 billion yuan and would include a longer tenor of five years, said one of the sources and two others. Those three people variously said the shorter of its two tenors would be two or three years.
Books for the deal should open on Wednesday, they added.
Eight investment banks are working on the dollar and euro transactions and seven are mandated on the offshore yuan tranche, according to the term sheet, which was seen by Reuters.
Calls with investors were underway on Tuesday, according to the term sheet.
Hong Kong’s first retail green bond was oversubscribed, attracting US$4.2 billion in orders in May 2022.
Christopher Hui Ching-yu, Hong Kong’s Secretary for Financial Services and the Treasury, had said in November 2022 that Hong Kong aims to expand the issuance of government green bonds by more than five times within the next five years.
Hong Kong has sold US$7.2 billion in sovereign green bonds across different currencies since 2019.
Sources: Reuters, South China Morning Post