First green bond nets US$1bn

Business | Reuters 23 May 2019

Hong Kong raised US$1 billion (HK$7.8 billion) from the sale of its first green bond yesterday, as the city looks to establish itself as a center for green finance.

Hong Kong sold a five-year US dollar-denominated green bond with a coupon of 2.5 percent, attracting over US$4 billion in orders from investors globally, the Hong Kong Monetary Authority said. The proceeds from green bonds get earmarked for investment in environmentally friendly projects.

The bond is the first to be issued under Hong Kong's HK$100 billion green bond program to fund projects around clean transportation, air quality improvement and green buildings. It is one of the largest green bond schemes globally.

"The favorable response from global investors indicates not only their recognition of Hong Kong's credit strength, but also their support of Hong Kong's determination and efforts in promoting sustainable development and combating climate change," said Financial Secretary Paul Chan Mo-po.

Worldwide corporate green bond issuance is at US$41.3 billion so far this year, , while sovereigns have raised US$17.8 billion.

Over 100 global institutional investors placed orders for Hong Kong's green bond, with 50 percent going to Asia, 27 percent to Europe and 23 percent to the United States, the HKMA said.

Sovereign wealth funds, supranationals and central banks took up the biggest share of the bond at 41 percent.

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