Hong Kong Launches HK$6B Tokenised Digital Green Bonds Offeringby Fintech News Hong Kong February 8, 2024
The Government of the Hong Kong Special Administrative Region (HKSAR) of the People’s Republic of China has today announced the successful offering of approximately HK$6 billion in digital green bonds under its Government Green Bond Programme.
This offering, denominated in Hong Kong dollars (HKD), Renminbi (RMB), US dollars (USD), and euro (EUR), marks a significant stride in the region’s commitment to sustainable finance and fintech innovation.
The two-year bonds attracted diverse global institutional investors, including major asset managers, banks, insurance companies, private banks, and non-financial corporates.
The bonds were issued across four tranches, with interest rates set at 3.800 percent for the HKD tranche, 2.900 percent for the RMB tranche, 4.749 percent for the USD tranche, and 3.647 percent for the EUR tranche.
This issuance builds on the HKSAR Government’s inaugural tokenised green bond from February 2023 and leverages learnings from Project Genesis, a collaboration between the Hong Kong Monetary Authority (HKMA) and the Bank for International Settlements Innovation Hub Hong Kong Centre to explore tokenised green bonds in the region.
Key innovations of this issuance include broadening investor participation through existing market infrastructure, streamlining the issuance process with a digitally native format, integrating green bond disclosures on digital assets platforms, and adopting the International Capital Market Association’s Bond Data Taxonomy for enhanced market efficiency and interoperability.
The clearing and settlement of the Digital Green Bonds will be managed by the Central Moneymarkets Unit (CMU), with HSBC Orion serving as the digital assets’ platform.
This offering represents the world’s first multi-currency digital bond and Hong Kong’s first digitally native bond issuance. Key financial institutions, including HSBC, Bank of China (Hong Kong), and UBS, played critical roles in preparing for this issuance. UBS made a significant investment in the bonds through its Group Treasury.
Christopher Hui, the Secretary for Financial Services and the Treasury, said,
“The second issuance of digital green bonds demonstrates the Government’s continuous support to innovative forms of bond issuances and green transformation. We are confident that this issuance will further entrench the social awareness of sustainable development in combination with fintech and consolidate Hong Kong’s status as a leading green and sustainable finance hub.”
Eddie Yue, the Chief Executive of the HKMA, said,
“Building on the success of the inaugural digital bond offering last year, we are delighted to bring to the market another landmark issuance. This second digital issuance includes multiple innovations that broaden investor access, support interoperability, and improve transparency and efficiency. We hope this issuance would promote the development of the digital securities market and encourage the wider adoption of digitalisation technology.”
Featured image credit: Edited from Freepik