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 European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.
The European Council published a draft Commission Delegated Regulation to amend the regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
The European Securities and Markets Authority (ESMA) published a paper that examines the systemic risk posed by increasing use of cloud services, along with the potential policy options to mitigate this risk.
The Monetary Authority of Singapore (MAS) published amendments to Notice 635, which sets out requirements that a bank in Singapore has to comply with when granting an unsecured non-card credit facility to individuals.
The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.