Linklaters advises on the world’s largest digital bond offering by the Hong Kong SAR Government

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Aditi Raisurana
Communications & Corporate Affairs Manager, Asia
+6566925819 aditi.raisurana@linklaters.com

Linklaters has advised the joint lead managers and the trustee on the successful offering of approximately HK$20bn equivalent multi-currency digital green bonds by the Government of the Hong Kong Special Administrative Region (HKSAR Government) of the People’s Republic of China under the Government Sustainable Bond Programme.

The offering, comprising tranches denominated in Hong Kong dollars, renminbi, US dollars and euros, has set a new record as the world’s largest digital bond issuance. It represents the HKSAR Government’s fourth digital green bond offering, with Linklaters having advised on all four transactions.

The digital green bonds were issued in a digitally native format using HSBC Orion* and are listed on The Stock Exchange of Hong Kong Limited and are cleared and settled through the Hong Kong Monetary Authority’s Central Moneymarkets Unit (CMU). The offering represents the world’s first digital bond that integrates tokenised deposits in HKD, enabled by Ensemble^TX, in the primary issuance settlement process for the Hong Kong dollar tranche and is the first digital bond offering using the HSBC Orion platform that uses a trustee structure. 

The Linklaters team was led by capital markets partner Michael Ng, with support from Lily Wang and Evelyn Chan. A separate Linklaters team led by counsel Beibei Ding acted as legal adviser to the trustee.

Michael Ng, Capital Markets Partner at Linklaters, commented:
 

“Having supported all four digital bond issuances by the HKSAR Government, we have seen each transaction build on the last to advance the practical application of bond tokenisation. The record scale of this latest issuance and the adoption of a trustee structure mark another significant step in the evolution of digital bonds and their broader market use. We congratulate the HKSAR Government on achieving another important milestone in its bond tokenisation journey.”

With 50 years of on-the-ground presence in Hong Kong SAR and the wider Asia region, Linklaters combines deep local insight with the strength and expertise of its global platform to support the continued development of the region’s capital markets. Having contributed to Hong Kong’s tokenisation journey from the outset, including by advising on all four of the HKSAR Government’s digital green bond offerings, Linklaters has also been appointed to the Hong Kong Monetary Authority’s Tokenised Bond Expert Group to help shape the further adoption and development of tokenised bonds in Hong Kong.

*HSBC Orion refers to the distributed ledger technology platform provided by HSBC as the platform provider to the CMU as the platform operator for the purposes of, among other things, recording, clearing and settling the digital green bonds.