Hong Kong property developer Hysan Development Company on July 21 announced the establishment of its sustainable finance framework, which provides the group the basis to raise funds for eligible green or social projects through the issuance of green, social or sustainability bonds, loans or other capital market instruments.
The addition of eligible social projects to the latest framework creates an opportunity for Hysan to secure direct funding from future financing transactions towards projects and initiatives that would yield positive impact for society, stakeholders and communities served by the group. The establishment of its inaugural sustainable finance framework marks an important milestone for Hysan's sustainability journey as it seeks to expand the scope of its green finance framework, which was completed in January 2019.
As per the framework’s guidance, the sustainability bond provides funding for projects that meet the eligibility criteria and fall under the categories of green buildings, energy efficiency, renewable energy, waste management and recycling, climate change adaptation, affordable basic infrastructure as well as pandemic and infection-related investments and expenditure.
Hysan chief operating officer Ricky Lui says the company’s decision to expand the scope of its green finance framework to also include funding of social projects reflects the alignment of Hysan's sustainability vision, strategies and targets with the group's financing activities.
Under the framework, the group has successfully raised its first sustainability bond amounting to HK$400 million (US$51.48 million) for five years at a coupon rate of 1.5%. The group expects to allocate over 80% of the net bond proceeds to social and community projects and utilize the remaining amount in environmental projects.
Hysan’s sustainable finance framework was reviewed by Sustainalytics, which has provided a second-party opinion confirming the alignment of the framework with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, Social Bond Principles 2021 and Green Loan Principles 2021.
UBS acted as sole sustainable finance adviser and bookrunner for the offering.