Major listed property investment, management and development group Hongkong Land on July 6 priced its inaugural green bond offering amounting to US$500 million, underscoring its commitment to both sustainability and development of green financing in the region.
The Reg S 10-year deal was priced at 99.432% with a coupon of 2.25% to offer a yield of 2.314%. This represented a spread of 90bp over the US treasuries, which was in line with the final price guidance and 35bp tighter than the initial price range of 125bp area.
The transaction was 3x oversubscribed as it generated an order book in excess of US$1.6 billion from 100 accounts. In terms of geographical distribution, 97% of the bonds were sold in Asia and 3% in Europe. By type of investors, fund managers accounted for 52% of the paper, banks 37%, insurance companies 6%, public sector 3%, and private banks and other investors 2%.
The net proceeds from this inaugural green bond will be used to fund the group’s initiatives relating to green buildings, energy efficiency, renewable energy, clean transportation, sustainable water management and climate change adaptation in accordance with the newly established Hongkong Land green financing framework.
“The successful pricing of Hongkong Land’s first green bond represents another significant step taken by the group towards integrating sustainability in all aspects of our business, and further underscores our ongoing commitment to the development of green capital markets,” says Hongkong Land chief financial officer Simon Dixon.
Hongkong Land’s green financing framework received a full alignment opinion from S&P Global Ratings with respect to the latest Green Bond Principles issued by the International Capital Market Association (ICMA) and Green Loan Principles issued by the Loan Market Association.
HSBC acted as the green structuring adviser and the sole global coordinator for the transaction as well as a joint bookrunner and lead manager along with Bank of China (Hong Kong) and DBS.
Hongkong Land owns and manages more than 850,000 sq m of prime office and luxury retail property in key Asian cities, principally in Hong Kong, Singapore, Beijing and Jakarta. The group also has a number of high-quality residential, commercial and mixed-use projects under development in cities across China and Southeast Asia.