The government of the Hong Kong Special Administrative Region of China (HKSAR) confirmed the successful offering of USD 2.5 billion of green bonds under the Government Green Bond Program. HKMA acts as the representative of HKSAR government for the green bond offerings under the Government Green Bond Program. The offering comprises three tranches of USD 1 billion 5-year, USD 1 billion 10-year and USD 500 million 30-year green bonds, which will build a comprehensive benchmark curve for potential issuers in Hong Kong and the region. The green bonds are expected to be listed on the Hong Kong Stock Exchange and the London Stock Exchange.
The 30-year tranche is also the first 30-year green bond to be issued by an Asian government and the longest tenor to be issued by the HKSAR government. Overall, the deal attracted strong interest from a diverse group of conventional and green investors. There was overwhelming demand from Asian institutional investors, resulting in the overall allocation of 65% of the total issuance size to this group. This reflects the strong pickup in Asian investors’ appetite for green financial products and demonstrates Hong Kong’s leading role in championing green finance in the region. European and U.S. investors received an allocation of 20% and 15% of the total issuance, respectively. Worth noting is the strong preference of European and U.S. investors for longer-tenor green bonds, with a combined allocation of half of the 30-year tranche. By investor type, 34% of the green bonds were distributed to banks; 46% to fund managers, private banks, and insurance companies; and 20% to central banks, sovereign wealth funds, and supranationals.
The HKSAR government had published the green bond framework in 2019, which sets out how green bond proceeds will be used to fund projects that will improve the environment and facilitate the transition to a low-carbon economy. The green bonds have also received the Green Finance Certificate (Pre-issuance Stage) from the Hong Kong Quality Assurance Agency. Credit Agricole CIB and HSBC acted as Joint Global Coordinators, Joint Lead Managers, Joint Bookrunners, and Joint Green Structuring Banks for the Green Bonds offering while BNP PARIBAS, Citigroup, ICBC (Asia), J.P. Morgan, and Standard Chartered Bank acted as Joint Bookrunners and Joint Lead Managers.
Keywords: Asia Pacific, Hong Kong, Banking, Green Bonds, ESG, Sustainable Finance, HKMA
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.
The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.
The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.
The European Banking Authority (EBA) published a methodological guide to mystery shopping.
The Australian Prudential Regulation Authority (APRA) released a letter to authorized deposit-taking institutions to provide an update on key policy settings for the capital framework reforms, which will come into effect from January 01, 2023.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs.
The Bank of England (BoE) published questions and answers (Q&A) on OSCA to BEEDS migration for statistical reporting as well a presentation from the project overview session held with statistical reporters.
The Basel Committee on Banking Supervision (BCBS) is consulting on a technical amendment to the Basel Framework to reflect a new process reviewing the global systemically important bank (G-SIB) assessment methodology.