Hong Kong Monetary Authority Announces Interest Rate for Retail Green Bonds Due 2026

The Hong Kong Monetary Authority (HKMA), acting as the representative of the Hong Kong Special Administrative Region Government, has announced the interest rate for the second interest payment of the retail green bonds due in 2026. These bonds, identified by Issue Number 03GR2610R and Stock Code 4273, form part of the Government Sustainable Bond Programme, previously known as the Government Green Bond Programme.

Details of the Interest Rate

According to the Issue Circular dated 18 September 2023, the second interest payment for these retail green bonds is scheduled for 10 October 2024. The interest rate was determined on 25 September 2024 and is based on the higher of the prevailing Floating Rate and Fixed Rate.

On the specified date, the Floating Rate was recorded at +1.80%, while the Fixed Rate stood at +4.75%. Consequently, the applicable interest rate for the second interest payment has been set at 4.75% per annum.

Context and Implications

The retail green bonds are part of the Hong Kong Government's broader initiative to promote sustainable finance and green investments. The Government Sustainable Bond Programme aims to fund projects that contribute to environmental sustainability, including renewable energy, energy efficiency, and pollution prevention.

The interest rate announcement is crucial for investors and market participants, providing clarity on returns and reinforcing the stability and attractiveness of Hong Kong's green finance market. The fixed rate of 4.75% per annum offers a competitive return, especially in the context of current market conditions and interest rate trends.

Related Developments

In recent months, there has been a growing interest in green bonds globally, driven by increasing awareness of environmental issues and the need for sustainable investment options. Hong Kong continues to position itself as a leading hub for green finance in Asia, leveraging its robust financial infrastructure and regulatory framework.

Furthermore, the HKMA's commitment to transparent and timely announcements regarding bond interest rates underscores its role in maintaining market confidence and investor trust.

For more information, visit the official HKMA press release.