Institutional Green Bonds
The Hong Kong Monetary Authority (HKMA) stated that it has successfully issued institutional green bonds based on the government’s green bond program, with a total value of $6 billion.
The green bonds attracted nearly $30 billion in subscription funds, reflecting Hong Kong’s attractiveness in green and sustainable finance. The bonds are rated AA+ by S&P and AA – by Fitch, and will be listed on the Hong Kong Exchange and London Stock Exchange. The raised funds will be used for environmentally friendly projects.
The History of Green Bond Issuance in Hong Kong
In March 2019, Hong Kong released a green bond framework, explaining how to use green bonds to improve the environment and promote low-carbon economic development. In 2022, Hong Kong will once again update this framework to align green bonds with international standards. In addition, Hong Kong has issued a green bond framework for three consecutive years, introducing the use of funds.
This green bond is the third green bond issued by Hong Kong in 2023. In January of this year, Hong Kong issued $5.8 billion worth of green bonds. In February of this year, Hong Kong issued HKD 800 million tokenized government green bonds. Meanwhile, this issuance is also the seventh under the government’s green bond program.
Related Post: Hong Kong Issues Tokenized Government Green Bonds
Investors in Green Bonds
The green bonds are mainly aimed at institutional investors. According to Hong Kong Monetary Authority, investors involve various entities such as banks, fund companies, and sovereign funds. Bonds are denominated in three currencies: USD, EUR, and RMB, with investors from different entities accounting for the following proportions:
| Category | USD Green Bonds | EUR Green Bonds | RMB Green Bonds |
| Banks | 39% | 43% | 74% |
| Central banks, sovereign wealth funds and international organizations | 20% | 26% | 14% |
| Fund managers, private banks, insurance companies and others | 41% | 31% | 12% |
This green bond issue does not involve individual investors. Last May, Hong Kong issued retail green bonds worthing $2.6 billion, which is also the largest retail green bond issue in the world.
Reference:
HKSAR Government’s Institutional Green Bonds Offering
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