Hong Kong makes yuan green bond debut with 5b yuan debt sale

[HONG KONG] Hong Kong is following up last week's debut euro green bond deal with an inaugural five billion yuan-denominated offering, part of efforts to encourage Chinese issuers to use the city for green financing.

The Hong Kong government on Tuesday sold 2.5 billion of three- and 2.5 billion of five-year yuan green bonds (S$1.07 billion), at 2.8 per cent and 3 per cent, respectively, according to a person familiar with the matter who isn't authorized to speak publicly and asked not to be identified.

The levels are 40 basis points below initial forecasts. Order books were above 15.9 billion yuan by late afternoon, the person said.

The city earlier this month priced green bonds in both US dollars and euros, raising a combined US$3 billion.

Financial Secretary Paul Chan disclosed the planned yuan green bond Sunday, writing on his blog that Hong Kong selling the debt is one part of the government's efforts to make the city a regional green financial centre.

Its de facto central bank and the Bank of International Settlements recently announced they've developed prototype platforms intended to give retail investors easier access to green bonds and allow them to track the environmental impact in real time.

There has been US$7.7 billion of the debt sold by Hong Kong borrowers this year, according to data compiled by Bloomberg, after nearly US$10 billion had been issued up until 2021. Last year's total green bond sales were US$2.1 billion.

BLOOMBERG