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Hainan launches RMB 5 billion offshore bonds in Hong Kong

PRNewswire September 15, 2023

HAIKOU, China, Sept. 14, 2023 /PRNewswire/ — A report from Hainan International Media Center (HIMC):

China’s southernmost province Hainan issued offshore bonds (also known as Dim Sum Bonds) worth 5 billion yuan (US$686 million) in the Hong Kong SAR on September 13, which are listed on the Hong Kong Stock Exchange.

Certified by the Hong Kong Quality Assurance Agency, the new Hainan bonds include 3 billion yuan in two-year bonds for sustainable development with a coupon rate of 2.45%, 1 billion yuan in three-year ‘green’ bonds focusing on biodiversity with a coupon rate of 2.53%, and 1 billion yuan in five-year ‘blue’ bonds labeled for ocean-related projects with a coupon rate of 2.70%.

The bond sale has attracted strong response from investors, with confirmed orders from a total of 35 accounts from different countries and regions, including policy and commercial banks, asset management firms, and funds. Orders totaled 12.9 billion yuan (US$1.77 billion) at their peak, oversubscribing the bond by 2.58 times.

Located in the Haikou Dayingshan Central Business District, the Window to Global Trade (WGT) building plays a key role in attracting foreign investment in south China's Hainan Free Trade Port. (PRNewsfoto/Hainan International Media Center (HIMC))

Settlement of allocated bonds will be handled via the Hainan Free Trade (FT) accounts, a convertible accounting system with RMB as its base currency. These accounts are aimed at accommodating the expected increase in cross-border transactions and foreign investment in the Hainan Free Trade Port.

This is the second time for the Hainan government to issue offshore bonds in Hong Kong following last year’s successful issuance of ‘blue’ bonds and sustainable development bonds. This year, Hainan will be the first local government in the Chinese Mainland to test the waters by issuing the nation’s first-ever biodiversity-themed ‘green’ bonds, offering international investors more asset allocation options for RMB bonds.

Proceeds from the sale of the bonds will primarily go toward improving healthcare and education, as well as strengthening marine conservation, environmental monitoring & restoration, and biodiversity protection.

The Hainan government is issuing these offshore bonds in order to deepen reform and opening-up, accelerate the implementation of sustainable development strategies, and advance the development of the national ecological civilization pilot zone.

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SOURCE Hainan International Media Center (HIMC)

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