Hainan province plans to issue offshore RMB bonds up to 5 billion yuan ($686 million) in Hong Kong on Wednesday, according to the provincial finance bureau.
The bonds will be listed on the Hong Kong Stock Exchange in two-, three- and five-year terms, offering international investors more options for RMB asset allocation.
The two-year bonds are sustainable development bonds. The three-year bonds are biodiversity-themed green bonds, the first of their kind to be issued by a local government in China. The five-year bonds are blue bonds, of which the proceeds will mainly be used for maritime economy and marine protection projects.
In October, the Hainan government issued the inaugural blue bonds and sustainable development bonds in Hong Kong.
The issuance of offshore RMB bonds by the Hainan government is to deepen reform and opening-up and innovate its financial system. Proceeds from the sale of the bonds will primarily go toward healthcare, education, environmental monitoring and restoration, biodiversity protection and marine conservation. The aim is to accelerate the implementation of the sustainable development strategy, advance the construction of the national ecological civilization pilot zone and promote marine ecological protection and restoration.
Wang Youxin, senior researcher at the Bank of China Research Institute, noted that Hainan's issuance of offshore RMB bonds in Hong Kong will diversify investment options and attract more overseas investors to invest in RMB assets.
"It can also provide more diverse sources of funds for the construction of the Hainan Free Trade Port. Meanwhile, by issuing offshore RMB bonds in the international market and being expected to more than double the subscription, Hainan's visibility and image will be enhanced, opening a larger window for the province to attract international capital and cooperation," he said.
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