Hong Kong Financial Secretary Paul Chan Mo-po hosts a press conference on the issuance of retail green bond, Hong Kong, Feb 15, 2022. (PHOTO / HKSASR GOVERNMENT)
HONG KONG – The Hong Kong Special Administrative Region government’s inaugural retail green bond received an enthusiastic response from the city’s retail investors as subscriptions closed at 2 pm on Friday, official and security companies said.
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The initial subscription for the green retail bond from the city’s approximately 493,000 retail investors involved around HK$32.9 billion ($4.2 billion), 2.2 times the target issuance size of HK$15 billion, a government spokesperson said on Friday.
The bond will have a tenor of three years. The entry fee for a single lot of retail green bonds is HK$10,000. Bondholders will be paid interest every six months at a rate linked to inflation in Hong Kong, subject to a minimum rate of 2.5 percent
The spokesman added that green bond issuance size was expected to be raised to a maximum of HK$20 billion due to overwhelming response from the public.
Edmond Hui Yik-bun, executive director and CEO at Bright Smart Securities & Commodities Group, said Friday that more than 65,000 people had subscribed to the green bond via the company’s platform, with an average of five to seven lots per person.
Futu Securities International (Hong Kong) said that as of 5 pm Thursday, it had received 80,000 applications, subscribing an amount of HK$3.82 billion ($490 million). Investors on average hold five lots per person, and the maximum subscription was 600 lots.
The bond will have a tenor of three years. The entry fee for a single lot of retail green bonds is HK$10,000. Bondholders will be paid interest every six months at a rate linked to inflation in Hong Kong, subject to a minimum rate of 2.5 percent.
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Subscriptions commenced at 9 am on April 22 and ended on 2 pm on May 6. The bond will be listed on the Hong Kong Stock Exchange on May 19 and can be traded on the secondary market afterward.
The bond proceeds will be used to fund projects that fight climate change and help transition Hong Kong to a low-carbon economy, such as renewable energy, pollution control, water and waste-water management, clean transport, green buildings and climate-change adaptation.
The government had initially planned to sell HK$6 billion worth of green bonds from March 1, but it was delayed due to the worsening pandemic situation.
xinlanzeng@chinadailyhk.com