30/05/23

HONG KONG: Jurisdiction aims to raise $4-6 bln in green bonds, according to sources.

As published on financialpost.com, Tuesday 30 May, 2023.

Hong Kong’s government is aiming to raise $4 billion to $6 billion in a multi-currency green bond deal, according to two sources with direct knowledge of the matter.

The sources could not be named as the information is confidential.

The Hong Kong government referred a request for comment to the city’s Monetary Authority, which did not immediately respond to Reuters.

The deal consists of 3-, 5- and 10-year dollar green bonds, according to a term sheet seen by Reuters.

A separate term sheet showed the government is also carrying out an offshore Chinese yuan green bond with 2-, 5- and 10-year tenors.

Hong Kong also plans to issue a Euro green bond, according to the sources, but details of that will be released later on Wednesday.

The deal is the second green bond carried out by the city this year after it raised $5.75 billion worth of bonds in dollars, euros and green bonds in January.

Initial price guidance has been set at Treasuries plus 65 basis points (bps) for the 3-year dollar bond, Treasuries plus 70 bps for the 5-year and Treasuries plus 80 bps for the longer-dated bond, the term sheet showed.

For the offshore yuan tranche, price guidance is set at 3.15% for the two-year, 3.4% for the five-year and 3.7% for the ten-year bond.

Hong Kong’s government plans to use the funds raised to finance projects that provide ‘environmental benefits and support the sustainable development’ of the city, according to the term sheet.