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Hong Kong government issues $2.5bn in green bonds

Out-Law News | 04 Feb 2021 | 5:55 am | 1 min. read

The government of Hong Kong Special Administrative Region of China (HKSAR) this Wednesday launched green bonds worth $2.5 billion, to be available on the Hong Kong Stock Exchange and the London Stock Exchange on 2 February.

The offering includes $1bn 5-year bonds at 0.635%, $1bn 10-year bonds at 1.414% and $500 million 30-year bonds at 2.431%. This is the first 30-year green bond issued by an Asian government and the longest period that has been issued by the HKSAR government, a statement said.

Asian institutional investors have been allocated 65% of the total, investors from Europe were allocated 20% and US investors received 15% of the total.

34% of the bonds were allocated to banks, 46% to fund managers, private banks and insurance companies, and 20% to central banks, sovereign wealth funds and supranationals - multinational unions or associations that formed by different countries.

John Yeap of Pinsent Masons, the law firm behind Out-Law, said: “As Hong Kong is obligated under the Paris Agreement, and given the intensity of the city’s energy use coupled with the limited geographical space, the opportunities to reduce our carbon emissions will require efforts across multiple fronts, including renewable energy and energy efficiency, clean transportation, green buildings and more. Funding such efforts should be consistent with the overall Paris objective, and given the leading financial role HK plays in finance in the region, it is well placed to be the region’s leading green finance centre. The recent round of capital raising by the HKSARG is indicative of the ability of the city to meet that challenge and the important role it can play in the global efforts to achieve net zero.”

The HKSAR Government published its Green Bond Framework in 2019.