Hainan to issue dim sum bonds in HK

The country's southernmost province of Hainan plans to issue up to 3 billion yuan ($421.8 million) in offshore renminbi bonds in the Hong Kong Special Administrative Region, marking its third consecutive year of tapping the dim sum bond market.

The People's Government of Hainan and the Hong Kong Monetary Authority jointly hosted an investor roadshow on Wednesday to promote the bond sale. This follows Hainan raising 5 billion yuan through a mix of green, blue and sustainable bonds last year, and a 5 billion yuan offering in 2022.

This year's bond sale is expected to include three tranches: a three-year green bond for environmental and social sustainability projects, a five-year bond for general government use, and a 10-year blue bond focusing on ocean-related initiatives.

The pricing of the bonds is expected to take place on Thursday.

Under Secretary for Financial Services and the Treasury of the HKSAR government Joseph Chan Ho-lim said that the sale "marks Hainan's first 10-year long-term offshore renminbi bond, further enriching Hong Kong's renminbi financial product offerings and supporting the internationalization of renminbi".

"For years, Hong Kong has been Asia's largest international bond issuance center and hosts the world's largest offshore renminbi liquidity pool," he added.

Chan noted that Hainan's bond issuance in Hong Kong demonstrates the SAR's crucial role as a "superconnector" between the Chinese mainland and the rest of the world, and "super value-adder" in international finance.

Kenneth Hui Wai-chi, the executive director (external) of the Hong Kong Monetary Authority, said the bond structure reflects the mainland authorities' commitment to sustainable development and the national "30/60 dual carbon" goal, referring to peak CO2 emissions before 2030 and achieve carbon neutrality before 2060.

Hui noted the fundraising amount will be used for critical areas such as marine protection, water pollution control, and projects supporting public welfare in healthcare and education.

The island province posted a 766 billion yuan GDP last year, marking an increase of 9.2 percent year-on-year.

Li Lei, deputy director of the Department of Finance of Hainan province, said that Hainan's local government debt balance stood at 410.6 billion yuan in 2023, accounting for 54.4 percent of the province's GDP.

From 2020 to June this year, the Hainan free trade port recorded duty-free imports totaling 20.75 billion yuan, with total tax exemptions reaching 4 billion yuan, Li added.