Bank of China (3988) said it assisted the Shenzhen Municipal People’s Government to issue offshore yuan-denominated local government bonds in Hong Kong on Wednesday, with a total issuance size of 4 billion yuan (HK$4.67 billion).
The issuance comprises a five-year tranche of 2.5 billion yuan and a 10-year tranche of 1.5 billion yuan, with the five-year tranche designated as a low-carbon city-themed green bond.
Coupon rates were set at 1.51 percent and 1.81 percent, respectively, and the order book has oversubscribed nine times. Proceeds will be used in projects such as metro construction.
Wang Huabin, deputy chief executive of Bank of China (Hong Kong) (2388), noted that Shenzhen Municipal People's Government has issued bonds in Hong Kong for six consecutive years, demonstrating that offshore issuance is gradually becoming a regular financing channel.
Wang said Shenzhen, as a central city and one of the core destinations of the Guangdong-Hong Kong-Macao Greater Bay Area, saw strong demand from both mainland and offshore investors for high-quality yuan bond assets. The issuance will help further consolidate Hong Kong's position as a global offshore yuan business hub and steadily advance the yuan internationalization.
