HKSAR Government’s Institutional Green Bonds and Infrastructure Bonds Offering

The Hong Kong SAR government successfully issued approximately HK$27 billion worth of green and infrastructure bonds on June 4, 2025. These bonds, denominated in multiple currencies, include a HKD1.5 billion 30-year infrastructure tranche, a RMB4 billion 20-year green tranche, and others. The offering attracted substantial investor interest, with orders totaling around HK$237 billion. The Financial Secretary emphasized that these bonds will support green projects and infrastructure development, extending the local bond market's yield curve. The bonds, expected to be settled and listed in June 2025, received high credit ratings from S&P and Fitch. Proceeds will be directed to the Capital Works Reserve Fund and are aligned with the HKSAR government's green and infrastructure bond frameworks. Annual reports on green bond allocations and expected environmental benefits have been published since 2019.

The investor distribution for the project categorizes investors into various groups, with high net worth individuals ("HNWIs") and family offices comprising the largest portion. Additionally, corporate investors and strategic investors contribute to the funding pool. Understanding the distribution of these investor categories is crucial for assessing the overall financial structure and the project's future performance.

The 'Category' section outlines various classifications of topics or items, facilitating content organization. Subcategories are used to provide a comprehensive overview, enhancing the ease of navigation and understanding.

The list of categories covers an extensive range of subjects, each detailed with further subcategories, enabling easy navigation and comprehension of the material.

The HKD bond market is a critical component of Hong Kong's financial system, attracting local and foreign investment and providing funding for various activities. HKD bonds are denominated in Hong Kong Dollars ("HKD"), making them attractive to local investors and issuers.

Key features of HKD bonds include liquidity, tax incentives, and regulatory advantages, which make them favorable for local businesses, the government, and financial institutions. The market is accessible to foreign investors in Asia, drawn to Hong Kong's financial stability and strong governance.

The Hong Kong Monetary Authority ("HKMA") regulates the issuance and trading of HKD bonds, ensuring their integrity and liquidity.

RMB bonds are fixed-income securities denominated in the Renminbi ("RMB") and traded on various Chinese exchanges, offering exposure to the Chinese economy with potential for higher returns. Key features include varying maturities, interest rates, and credit ratings.

USD bonds, issued by the US government, are denominated in US Dollars and are considered risk-free due to their backing by the full faith and credit of the US government. They are widely used as benchmarks and provide a safe and liquid investment option. These bonds are categorized by maturity date into short-term (up to 1 year), intermediate-term (1-10 years), and long-term (over 10 years) categories.

The 'EUR Bonds' section discusses the distribution and ownership of European bonds, with banks holding the highest proportion at 75%. Central banks, sovereign wealth funds, and international organizations hold 13%, and the remaining 73% is held by fund managers, private banks, insurance companies, and others. Bonds are offered in various formats, including Reg S for HKD, RMB, and EUR Bonds, and 144A/Reg S for USD Bonds.