New World China Land Limited (New World China), the Mainland property arm of Hong Kong’s New World Development, is selling US$2 billion of five-year green bonds to finance two projects in China. They are the company’s first green bonds, and the second ever such offering by a Hong Kong property developer as the city gears up to position itself as a major corporate green bond market.
Swire Properties was the first Hong Kong property developer to sell green bonds, with a $500 million 10-year debt issuance in January.
New World China will use the proceeds of its bond sale to finance two residential and commercial projects – the Qianhai CTF Finance Tower and the New World Zengcheng Comprehensive Development Project – in the Greater Bay Area in southern China, the company says in a statement on November 21. The projects are due to be completed in 2021.
The roadshow for the bond offering, which is targeted at institutional investors, is ongoing. The bond sale “gives institutional investors the opportunity to participate in China’s real estate sector and support its green growth,” according to New World China.
The Greater Bay Area is a master plan launched several years ago by the Chinese and Hong Kong governments. It aims to integrate Hong Kong, Macau, and nine cities in Guangdong province in southern China to develop the region as a technology, business and finance hub by 2030.
Adrian Cheng, executive vice-chairman and general manager of New World China, says in the statement that parent company New World Development “is pleased to support green financing in line with China’s goal to build an ‘ecological civilisation’ and Hong Kong’s growth as a green finance hub.” The issuance is based on eligibility criteria for green projects under New World Development’s Green Finance Framework, which outline its principles for sustainable development.
Hong Kong and Shanghai Banking Corporation (HSBC), Mizuho Securities, BNP Paribas, DBS Bank, and Credit Agricole CIB are the joint global coordinators for the bond offering. HSBC and Natixis are joint green structuring advisers.
The Hong Kong government is looking to expand the city’s green bond market. Bank of America Merrill Lynch said in a report in October that Hong Kong is one of the fastest growing green bond markets in Asia, with $500 million of issuances in the first ten months of 2018 compared to $118 million in all of 2017.
Hong Kong Chief Executive Carrie Lam said in September that the government is taking steps to develop the city as one of the world’s largest corporate green bond market with a target size of HK$100 billion ($12.82 billion) over the long term. New World Development had assets valued at approximately HK$481.5 billion as of June 30, 2018.
Source Asia Asset