Secretary for Financial Services and the Treasury Christopher Hui Ching-yu (center) hosts a press conference to announce the launch of a new batch of retail green bonds, on Sept 5, 2023, in Hong Kong. (PHOTO PROVIDED TO CHINA DAILY)

Hong Kong on Friday announced the allocation of its second batch of retail green bonds valued at HK$20 billion ($2.55 billion), HK$5 billion higher than the target size, given public enthusiasm for the subscription. 

According to the subscription information submitted by placing banks and Hong Kong Securities Clearing Company Limited, 321,018 valid applications were received for more than HK$30 billion in principal amount of bonds.

The valid applications received have been allocated different amounts up to a maximum of nine lots, the Hong Kong Special Administrative Region government announced in a statement

The bonds, offered at HK$10,000 per unit with a tenor of three years, will be issued on Tuesday and listed on the Hong Kong Stock Exchange the following business day. They can be traded on the secondary market afterward.

READ MORE: HK's 2nd batch of retail green bonds open for subscription

The valid applications received have been allocated different amounts up to a maximum of nine lots, the Hong Kong Special Administrative Region government announced in a statement. 

There were 184,021 applications for eight or fewer lots. They will be allocated the full amounts applied for. The remaining 136,997 will be allocated eight lots each and then entered into a ballot. Of these applications, 4,187 will be allocated one additional lot.

Interest on the retail green bonds will be paid every six months with a rate linked to the city’s inflation rate, or a minimum rate of 4.75 percent, higher than that offered by most banks for fixed deposits.

Proceeds raised under the green bond program will be used for financing government projects with environmental benefits.

Financial Secretary Paul Chan Mo-po said the latest batch of retail green bonds offers members of the public investment options with steady returns and remains popular with the public. 

“We will continue to work with the regulators and stakeholders in the industry to enrich the green and sustainable finance ecosystem in Hong Kong, further facilitate market development and promote green transformation with the public,” Chan said. 

READ MORE: Hong Kong raises $6 billion in its biggest green bonds sale

The Industrial and Commercial Bank of China (Asia) said the latest offering of retail green bonds elicited a positive response, citing an increase of more than 20 percent in the average number of subscribed lots compared to 2022, with the highest by one investor of 160 lots, or an investment of HK$1.6 million.

The government has issued close to $22 billion worth of green bonds since the Green Bond Program started in 2018.

The first batch of retail green bonds issued last year was popular, with 488,353 valid applications made by Hong Kong residents, and a subscription amount of HK$32.57 billion.