The Hong Kong Special Administrative Region (HKSAR) government on Wednesday announced the successful offering of 5 billion yuan (about 783 million U.S. dollars) offshore renminbi (RMB) green bonds.
The offering comprises 2.5 billion yuan (about 391 million U.S. dollars) of three-year bonds and 2.5 billion yuan of five-year bonds, the first offering of renminbi-denominated bonds by the HKSAR government, setting an important new benchmark for the offshore RMB market.
The green bonds were priced on Tuesday, Nov. 23, at 2.8 percent for the three-year tranche and 3 percent for the five-year tranche. The two RMB tranches saw strong demand from diversified groups of investors despite recent market volatility, attracting over 14.2 billion yuan in orders. As many as 54 percent of the green bonds were distributed to banks, 35 percent to fund managers, private banks and insurance companies, while 11 percent goes to supranationals, official institutions and corporates.
Paul Chan, financial secretary of the HKSAR government, said that this landmark offering further enriches the range of offshore renminbi financial products available in Hong Kong, consolidates Hong Kong's role as the premier offshore RMB centre and contributes to promoting the internationalization of the RMB.
"Together with the U.S. dollar and euro-denominated green bond offerings last week, it demonstrates Hong Kong's continued commitment to further develop the green bond market through piloting issuances with different parameters," he said.
The green bonds are expected to be settled on Nov. 30, 2021 and listed on the Hong Kong Stock Exchange and the London Stock Exchange.