On Monday, the Guangdong provincial government conducted a roadshow at the Hong Kong Monetary Authority (HKMA) for the issuance of offshore RMB local government bonds. This marks Guangdong's first-ever local bond issuance in Hong Kong, drawing investment institutions from countries including China, the U.S., Germany, the U.K., Switzerland, and South Korea.

The bond issuance is expected to raise up to 5 billion yuan, with tenors of two, three, and five years. Of these, 2 billion yuan from the two-year bonds will fund projects in Nansha District, Guangzhou; 1.5 billion yuan from the three-year bonds will support major infrastructure projects in the Pearl River Delta; and 1.5 billion yuan from the five-year green bonds will finance environmentally friendly projects. The bonds have been accepted as eligible collateral under HKMA's RMB liquidity facility, and interest income will be exempt from profits and stamp duties in Hong Kong, enhancing the bonds' liquidity and attractiveness to investors.

This marks Guangdong's first bond issuance in Hong Kong, following four consecutive years of issuances in Macao from 2021 to 2024, making Guangdong the first province to issue local government bonds in both Hong Kong and Macao.

Chen Guohuang, Director of the Guangdong Provincial Department of Finance, highlighted that issuing bonds in Hong Kong leverages the city's role as an international financial hub and offshore RMB business center. It also strengthens collaboration within the Greater Bay Area and supports the development of Hong Kong's offshore RMB market, reinforcing its position as a global financial center. Furthermore, this initiative will help attract international investors to major projects in the region, fostering Guangdong's high-quality economic growth.

Christopher Hui, Secretary for Financial Services and the Treasury of Hong Kong, emphasized that this issuance demonstrates deepening financial cooperation between Guangdong and Hong Kong as part of the Greater Bay Area's development. The inclusion of green bonds also underscores Hong Kong's role as a green finance hub. He added that the expansion of RMB products will further boost offshore RMB liquidity.