Wednesday May 22 2019
News Source: Global Exchanges
Focus: General - Global Exchanges
Country: Hong Kong
On 22 May 2019, the Government of the Hong Kong Special Administrative Region of the People’s Republic of China announced the successful offering of its inaugural green bond (the “Green Bond”) under the Government Green Bond Programme.
The Green Bond, with an issuance size of US$1 billion and a tenor of 5 years, is a landmark transaction which sets an important new benchmark for potential issuers in Hong Kong and the region.
Following a global roadshow commencing on 10 May 2019, covering Hong Kong, London, Paris, Frankfurt, Amsterdam, Boston, New York and Singapore, the Rule 144A/Reg S USD Green Bond was priced on 21 May 2019 at 2.555% (32.5 basis points over 5-year US Treasuries). Despite the recent financial market volatility, the Green Bond saw strong demand from global investors, attracting orders exceeding US$4 billion, which was more than 4 times the issuance size, allowing the final pricing to be tightened by 17.5 basis points from the initial price guidance.
The deal attracted interest from a diverse group of conventional and green investors. Orders were received from over 100 global institutional investors, and 50% of the Green Bond was distributed to Asia, 27% to Europe and 23% to the United States. By investor type, 29% was distributed to banks, 30% to fund managers, private banks and insurance companies, and 41% to sovereign wealth funds, central banks and supranationals.
The Green Bond is expected to be settled on 28 May 2019 and listed on the Hong Kong Stock Exchange and the London Stock Exchange. The Green Bond has been assigned credit ratings of AA+ by S&P Global Ratings and AA+ by Fitch.
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