The Hong Kong Mortgage Company (HKMC) has issued its third social bond issuance of round HK$23.8 billion ($3 billion).
The issuance, on October 9, is the most important social bond issuance in Asia Pacific, breaking the document set by the HKMC in September 2023 when it launched its second social bonds of near HK$20 billion.
The triple-currency social bond issuance with 4 tranches includes HK$7 billion 2-year, HK$8 billion five-year, CNH2 billion seven-year and $850 million three-year social bonds.
The HKMC stated that the issuance was “effectively obtained” by native and abroad institutional buyers together with banks, funding funds, government-related funds, wealth administration corporations and personal banks. There was a mixed peak order e-book of round HK$55 billion equal and remaining allocation to over 200 accounts.
The issuance adopted a sequence of investor roadshows and an enchancment in market sentiment, the issuance was book-built and priced in Hong Kong.
Furthermore, the 2 Hong Kong greenback (HKD) tranches totalling HK$15 billion was the largest-ever institutional bond denominated in HKD, whereas the Renminbi (CNH) tranche was the primary ever seven-year institutional bond denominated in CNH. The issuance has helped to determine new benchmarks throughout the yield curve for the market and has additional facilitated the bond market growth in Hong Kong.
The online proceeds from the issuance will primarily be used to finance or refinance the loans below the particular 100% mortgage assure of the SME Financing Assure Scheme. The particular 100% mortgage assure was launched in April 2020 to alleviate the money stream strain of small and medium-sized enterprises (SMEs) in Hong Kong throughout the Covid-19 pandemic, serving to to minimise enterprise shut-downs and layoffs.
The applying interval for the particular 100% mortgage assure expired at finish March 2, 2024. The product has been taken up by 40,000 native SMEs and 400,000 associated workers as much as September 2024. Earlier this week, Hong Kong’s chief govt John Lee provided a principal moratorium for as much as 12 months below the SME Financing Assure Scheme.
Raymond Li, govt director and chief govt officer of the HKMC, stated in assertion: “Our record-breaking social bond issuance as soon as once more demonstrated buyers’ sturdy confidence in Hong Kong and the HKMC.”
Li added: “With the financing from a broadened investor base and the participation of a various group of monetary establishments, the HKMC will proceed to ship on its coverage missions, help the native growth of sustainable finance and additional solidify Hong Kong’s function as a global monetary centre.”
The social bonds are issued pursuant to the HKMC’s Social, Inexperienced and Sustainability Financing Framework (SGS Framework).
The joint international coordinators, joint bookrunners and joint lead managers on the deal had been: Financial institution of China (Hong Kong), Crédit Agricole CIB, HSBC, and Normal Chartered Financial institution. The joint bookrunners and joint lead managers had been ANZ, BNP Paribas, China Building Financial institution (Asia), Citigroup, DBS Financial institution, ICBC (Asia), and Mizuho United Abroad Financial institution
The joint lead managers on the deal had been Financial institution of Communications, Barclays, China CITIC Financial institution Worldwide, China Worldwide Capital Company, JP Morgan, Morgan Stanley, Natixis, OCBC, SMBC, Nikko and UBS. The joint structuring banks on the deal had been Crédit Agricole CIB and HSBC.
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