Government Green Bond Issuance Guidelines

Issuance Amount:

The issuance amount is determined by the amount announced by the government for that particular series of green bonds.

Features:

The funds raised from issuing green retail bonds will be used to finance projects that fall under one or more "eligible categories" as defined in the green bond framework. The allocation of raised funds and the expected environmental benefits of funded projects will be detailed in the annual "Green Bond Report."

The bonds have a term of three years and will pay interest every six months. The interest is linked to the average annual inflation rate calculated based on the Composite Consumer Price Index, with a minimum interest rate set.

The principal amount will be fully repaid (i.e., 100%) upon the bond's maturity.

For more characteristics of green bonds, please refer to the following:

https://www.hkgb.gov.hk/en/greenbond/retail_Key.html 

Entry Fee

The minimum principal application amount for each lot is HK$10,000.

Interest Rate (Coupon Rate)

The bond has a term of three years, with interest paid at the end of every six-month period. The interest rate is linked to inflation, and the payment will be the higher of the floating interest or fixed interest. Due to rounding, the interest on bonds exceeding HK$10,000 may slightly differ from the interest amount calculated based on the minimum denomination of HK$10,000.

For details on the interest rate, please refer to the following:

https://www.hkgb.gov.hk/en/greenbond/retail_Rates.html 

Subscription Conditions

Green retail bonds are only available for application by individuals who hold a valid Hong Kong Identity Card and are at least 18 years old. Each person may submit only one application for the bonds; all duplicate applications will be disregarded, and all applications will be considered invalid.

*Non-permanent residents of Hong Kong who hold a Hong Kong Identity Card may also participate in the green bond subscription. However, individuals with U.S. or Canadian nationality are not eligible to subscribe.

Subscription Period

The subscription period for green retail bonds can be individually referenced from the issuance schedule published on the government website. Hong Kong residents can subscribe through placing banks, securities brokers, or Hong Kong Securities Clearing Company Limited. Please note that the Hong Kong SAR Government reserves the right to terminate or extend the sale period of the green retail bond series without prior notice. The government also retains the right to cancel the sale at any time on or before the scheduled issuance date.

For the latest issuance details, please refer to:

https://www.hkgb.gov.hk/en/institutional/institutionalschedule.html 

Allocation Rules

If green retail bonds are oversubscribed (i.e., the total principal amount of valid applications for this series exceeds the final issuance amount), the allocation of green retail bonds will depend on the number of valid applications received for this series.

If the number of valid applications for green retail bonds is equal to or less than the issuance amount (i.e., the final issuance amount divided by HK$10,000), the Hong Kong SAR Government intends to first meet the demands of investors who applied for a smaller number of green retail bonds at its discretion, and then allocate any remaining green retail bonds through a lottery system.

If green retail bonds are oversubscribed and the Hong Kong SAR Government cannot allocate one unit of HK$10,000 of green retail bonds to each applicant with a valid application, the government will allocate the green retail bonds through a lottery. Each successful applicant will be allocated green retail bonds with a principal amount of HK$10,000.

The allocation rules may be updated at any time; for more details, please refer to the government website:

https://www.hkgb.gov.hk/en/sustainablebond/sustainablebondintroduction.html