The Hong Kong Mortgage Corporation Limited (HKMC) has successfully raised approximately HK$23.8 billion (US$3 billion) equivalent through its third social bond issuance, setting a new record for Asia Pacific’s largest social bond offering. This milestone surpasses HKMC’s previous record, achieved in September 2023.
The bond issuance consists of four tranches across multiple currencies:
- HK$7 billion in 2-year bonds
- HK$8 billion in 5-year bonds
- CNH 2 billion in 7-year bonds
- US$850 million in 3-year bonds
Investor interest was exceptional, with a peak order book of approximately HK$55 billion equivalent and over 200 institutional investors participating. This strong demand reflects widespread confidence in the HKMC’s mission and Hong Kong’s financial market resilience.
Support for SMEs Amid Economic Challenges
The proceeds from this issuance will primarily fund the Special 100% Loan Guarantee Scheme, which provides critical financial support to small and medium-sized enterprises (SMEs) in Hong Kong. Launched in April 2020 during the COVID-19 pandemic, the scheme has helped around 40,000 SMEs and 400,000 employees, alleviating cash flow issues and minimizing business shutdowns and layoffs.
Raymond Li, Executive Director and CEO of HKMC, emphasized the significance of the issuance: “Our record-breaking social bond issuance once again demonstrates investors’ strong confidence in Hong Kong and the HKMC. With financing from a broadened investor base, we will continue to support local sustainable finance development and reinforce Hong Kong’s standing as an international financial hub.”
Market and Social Impact
This bond issuance also sets new benchmarks within the bond market: the two Hong Kong dollar tranches, totaling HK$15 billion, represent the largest-ever institutional bond in HKD, while the Renminbi tranche is the first-ever 7-year institutional bond in CNH. These efforts contribute to the continued development of Hong Kong’s bond market.
Commitment to Sustainable Finance
Issued under the HKMC’s Social, Green, and Sustainability Financing Framework, the bonds are designed to support sustainable finance initiatives. The proceeds will continue to bolster Hong Kong’s economic resilience while providing crucial support to SMEs during the post-pandemic recovery.
This landmark issuance underscores HKMC’s ongoing dedication to sustainable finance and solidifies its role in Hong Kong’s broader economic stability.
