Hong Kong’s government taps global market with institutional multi-currency green and infrastructure bonds

The bonds are denominated in four currencies: Hong Kong dollars (HKD); renminbi (RMB); U.S. dollars (USD); and euro (EUR). The green bonds and infrastructure bonds have been issued under the Government Sustainable Bond Programme and the Infrastructure Bond Programme. Both have been listed on the Hong Kong Stock Exchange and the London Stock Exchange.

The green bonds and infrastructure bonds offering comprised five tranches:

• HKD1.5bn 3.85% 30-year infrastructure tranche
• RMB4bn 2.60% 20-year green tranche
• RMB4bn 2.70% 30-year infrastructure tranche
• USD1bn 4.125% five-year green tranche
• EUR1bn 3.125% eight-year green tranche

The HKD 30-year bond was offered for the first time by the HKSAR Government and is the longest tenor HKD bond issued by the HKSAR Government so far.

The green bonds and the infrastructure bonds are being issued in accordance with the HKSAR Government’s Green Bond Framework and Infrastructure Bond Framework respectively. Proceeds raised will be credited to the Capital Works Reserve Fund to finance or refinance eligible green projects and infrastructure projects in accordance with the relevant frameworks.

Agnes Tsang, A&O Shearman partner commented: “We are honored to have advised the HKSAR Government on this landmark, multi-billion, multi-currency issuance of green bonds and infrastructure bonds. This successful transaction underscores the city’s commitment to sustainable development and infrastructure advancement and will have a significant and far-reaching impact. In addition, the inaugural offering of the 30-year HKD government bonds extends the HKD benchmark yield curve, further reinforcing the development of Hong Kong’s local bond market.”

The A&O Shearman deal team was led by partner Agnes Tsang, with support from Gordon Ng and Eileen Qu. Kyungwon (Won) Lee, Hae-Ran Song, and Rami Marginean provided U.S. law advice.