The Hong Kong government sold HK$27 billion (US$3.44 billion) in multicurrency green and infrastructure bonds to support the development of the Northern Metropolis, boosting the city’s reputation as a sustainable finance hub.
The notes, denominated in Hong Kong dollars, yuan, US dollars and euros, drew strong demand from investors globally amid an uncertain interest rate environment. The sale attracted orders totalling nearly HK$237 billion, translating into subscription ratios of between 3.3 and 12.5 times the size of the bonds, according to a statement from the Hong Kong Monetary Authority on Wednesday.
The offerings, which fall under the government’s sustainable bond programme and a newly established infrastructure bond programme, included a range of maturities of up to 30 years. It was the first time the government offered a 30-year Hong Kong dollar bond, which was also its longest tenor ever. The HK$1.5 billion note had a coupon of 3.85 per cent.
The size of the 20-year and 30-year yuan notes, which were introduced last year, was doubled in response to robust investor demand. The 20-year green and the 30-year infrastructure tranches – each amounting to 4 billion yuan (US$557 million) – were priced at 2.60 per cent and 2.70 per cent, respectively.
“The issuance of green bonds by the Hong Kong government aims to attract and channel market capital to support green projects [and promote] sustainable development in Hong Kong,” said Financial Secretary Paul Chan Mo-po.
He added that the infrastructure bonds would help accelerate the development of projects such as the Northern Metropolis and facilitate the early completion of projects. The Northern Metropolis initiative, unveiled by former chief executive Carrie Lam Cheng Yuet-ngor in her 2021 policy address, aims to transform 30,000 hectares (74,130 acres) in the New Territories into a new economic growth centre and housing hub.
