The MTR Corporation on Wednesday said it had sold HK$18.8 billion worth of green bonds, marking the first time the company has issued publicly offered Hong Kong dollar denominated bonds.

It also represented the largest transaction in the history of the Hong Kong dollar bond market, with a combined subscription amount exceeding HK$60 billion, three times the total issuance size.

In a statement, the city's railway giant noted the bonds were structured as a triple-tranche offering, with maturities of five years, 10 years, and 30 years respectively.

The size of each tranche also represented the largest for their respective tenors to date.

“The strong investor response to our latest green bond issuance underscores market confidence in the MTR’s credit quality, long-term strategy, and continued contribution to the city’s sustainability and future infrastructure needs,” said Michael Fitzgerald, the group's finance director.

Meanwhile, Jeny Yeung, the group's chief executive, noted the issuance came as part of the group's financing strategy to leverage the capital market to support the city's major railway infrastructure construction.

"Financial flexibility, together with the corporation’s long standing prudent financial management and rigorous project management, will continue to guide us through our continuous efforts to implement the new projects," she said.

"Upon completion, they will deliver an even more connected and low carbon public transport service for Hong Kong, and at the same time create new growth drivers for the business,” she added.

Green bonds are fixed-income financial products in which the money generated is earmarked for purposes such as financing renewable energy projects, electric vehicles or energy efficient building loans to consumers or businesses.

The MTR noted that the five-year tranche of the bonds totalled HK$8.5 billion, while the 10-year tranche amounted to HK$7.5 billion and the 30-year tranche HK$3 billion, with coupons of 2.88 percent, 3.3 percent, and four percent respectively.

"Proceeds from the issuance will be used to support eligible green investments as defined in the MTR’s Sustainable Finance Framework," the statement read.



Edited by Tony Sabine