Chinese Province Mobilises RMB 7.5B via Sustainability Bonds
In Short
- China’s Guangdong province raised RMB 7.5 billion in offshore local government bonds in Hong Kong.
- Green and blue bonds fund environmental and development initiatives.
- The bond issuance brought investors from many countries, with oversubscription reaching 2.7 times.
Guangdong, a coastal province of southeast China, issued three types of bonds in Hong Kong and raised a total of RMB 7.5 billion.
The issuance, reported by Xinhua News Agency, took place on October 17, which marks the second consecutive year that Guangdong sold local government bonds in the Hong Kong Special Administrative Region. These bonds are listed on the Hong Kong Exchange and Clearing.
The bonds were issued in three tranches based on maturity periods. The 3-year bonds, labelled as green sustainability bonds, amassed RMB 3.5 billion at a 1.72% coupon rate.
Read More: Blue Bonds: Catalysing Investment in Marine Conservation
The 5-year bonds pooled RMB 2.5 billion with a 1.80% interest rate, whereas the 10-year bonds, called blue sustainability bonds, raised RMB 1.5 billion at 2.09%.
The proceeds from these bonds will finance green and blue sustainability projects and development activities in Guangzhou Nansha, which aims to expand Guangdong-Hong Kong-Macao cooperation oriented toward global engagement.
Investors from various countries participated, including policy banks, commercial banks, funds, and asset management companies. The peak order book volume touched RMB 20 billion, 2.7 times the bonds offered, and upped confidence in Guangdong’s creditworthiness and development prospects.
Also Read: Green Bonds Explained: Definition, Types, Benefits & Risks
On the whole, this recurrent issuance in Hong Kong helps Guangdong raise funds for infrastructure projects in the Guangdong-Hong Kong-Macao Greater Bay Area, and also deepens regional financial cooperation as well as promotes high-quality growth.
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