The Hong Kong government has priced its inaugural HK$800 million ($102 million) digital green note, in what it claims to be the first tokenised sovereign green bond globally. The notes, which have a 365-day tenor, will pay a semi-annual coupon at 4.05%, in line with indicative rate first marketed to investors on Monday, according to a term sheet seen by Reuters
By Georgina Lee
HONG KONG, Feb 16 (Reuters) - The Hong Kong government has priced its inaugural HK$800 million ($102 million) digital green note, in what it claims to be the first tokenised sovereign green bond globally.
The notes, which have a 365-day tenor, will pay a semi-annual coupon at 4.05%, in line with indicative rate first marketed to investors on Monday, according to a term sheet seen by Reuters.
The proceeds raised will be used to finance or refinance projects that will provide environmental benefits and support the sustainable development of Hong Kong, the term sheet said.
The bond was issued using a blockchain platform run by Goldman Sachs (GS.N) that records the beneficial interests of the tokenised green notes, according to the term sheet.
The latest issuance represents a step forward from a separate trial co-led by the Hong Kong Monetary Authority which was aimed at enabling retail investors to download an app and invest any amount in government bonds by buying tokens.
With blockchain, the entire bond issuance and settlement process is automated, reducing the number of intermediaries involved.
Joint global coordinators on the bond issue include Bank of China (HK) (3988.HK) , Credit Agricole CIB (CAGR.PA) , HSBC (0005.HK) and Goldman Sachs (Asia).
Joseph Chan, Hong Kong’s Acting Secretary for Financial Services and the Treasury said in a blog post in November 2022 that the city’s inaugural tokenised bond, first targeting institutional investors, would become the first such issuance by a government globally.
But outside of sovereign debt securities Hong Kong is not the first. In May 2021 DBS priced a S$15 million ($11 million) digital bond, which had a tenor of six months and paid a coupon of 0.6% per annum.
In January the Hong Kong government sold $5.8 billion green bonds in three currencies comprising dollar, euro and offshore yuan, topping the government’s target to sell $4.5 billion in the 2022-23 fiscal year, which ends in March.
($1 = 7.8484 Hong Kong dollars)
($1 = 1.3336 Singapore dollars)