On April 2, London time, China's Ministry of Finance, on behalf of the central government, successfully book-entered and issued a RMB 6 billion green sovereign bond in London, U.K. The funds raised will be used entirely for qualified green expenditures in the central government's budget in accordance with the Framework for Green Sovereign Bonds of the People's Republic of China. The bonds are held in custody in the Central Moneymarkets Unit (CMU) of the Hong Kong Monetary Authority (HKMA) and will be listed on the Stock Exchange of Hong Kong and the London Stock Exchange.

The issue is divided into two varieties, 3-year and 5-year, both with a size of RMB 3 billion and final coupons of 1.88% and 1.93% respectively, both lower than the level of interest rates for treasury bonds of the same maturity in the secondary market of Hong Kong.

The bonds received wide attention and were well subscribed by investors in both domestic and overseas markets, with the final book size reaching RMB 41.58 billion and the overall subscription multiple of 6.9 times. There were a wide range of investor types, with sovereign and super-sovereign, banking, insurance and asset management investors accounting for 30%, 48% and 20% respectively; and there was a wide geographic distribution, with Asia-Pacific investors accounting for about 83.5% and non-Asia-Pacific investors accounting for about 16.5%. Meanwhile, the bonds attracted a high degree of attention from green and sustainable investors, with orders accounting for about 22% of the total book.

On the morning of April 3, London time, the Chinese Ministry of Finance held a ceremony at the London Stock Exchange. Chinese Vice Minister of Finance Liao Min attended the event and delivered a speech. He said that the issuance of the first RMB green sovereign bond in London is an important initiative to implement the important consensus between President Xi Jinping and Prime Minister Starmer, as well as the policy outcome of the 11th China-UK Economic, Financial and Monetary Dialogue. China's Ministry of Finance issued RMB treasury bonds in London for the second time after nine years, which is of great significance to further deepen and support Sino-British exchanges and cooperation in the field of green and economic and financial fields, and to support the stabilization of international investor confidence and stabilize market expectations.

Previously on February 20 this year, the Chinese Ministry of Finance officially released the first “Framework for Green Sovereign Bonds of the People's Republic of China” (hereinafter referred to as the “Framework”), which provides guidelines for the issuance of China's green sovereign bonds abroad. Funds raised from green sovereign bonds issued under the Framework will be fully utilized for qualified green expenditures (“green expenditures”) in the central government's budget and will contribute to the achievement of the following environmental objectives: climate change mitigation, climate change adaptation, natural resource conservation, pollution prevention and control, and biodiversity conservation.

Read more: China’s First Green Sovereign Bond Framework Unveiled: Pioneering a New Chapter in Green Finance

This is the first green sovereign bond issued by the Ministry of Finance (MOF) since the release of the Framework, and one of the important measures to implement the outcome of the 11th Sino-British Fiscal and Financial Dialogue, which has injected a green element into China's sovereign offshore multi-currency yield curve.

Author: Qinger