CHINA: MTR Corp has issued its first green bond. Eligible investments for green bonds include works relating to low-carbon transport, energy efficiency, sustainability, climate change, conservation, water management, pollution prevention and noise reduction.
‘As a low-carbon transport operator, we are pleased with the issuance of our first green bond which is a milestone for both our financial and environmental strategies’, said CEO Lincoln Leong on October 24. ‘Utilising green finance in this way allows us to tap into a new investor base and provide cost effective financing to invest in environmentally friendly service and network enhancements as envisaged in the Rail Gen 2·0 vision. We are also happy to be able to play a role in helping Hong Kong to develop as a regional green finance hub.’
MTR said the US$600m 10-year bond issued under its US$4bn debt issuance programme was priced at ‘the tight end of the indicated price range’ following strong demand from a diverse group of institutional investors and green investors in Asia and Europe.
Under-Secretary for the Environment Christine Loh said the Hong Kong SAR Government sees MTR Corp as ‘an essential stakeholder and facilitator in Hong Kong's low-carbon transition’, and ‘the good response to this green bond issuance shows the financial community's growing interest in investing in responsible and sustainable companies.’
Carrying a coupon rate of 2·5% per annum payable semi-annually with a maturity date of November 2 2026, it was priced at 99·675% face amount with an overall yield of 2·537%, 80 basis points over the benchmark 10-year US Treasury yield. MTR expects the bond to be rated AAA by Standard & Poor’s and Aa1 by Moody’s Investor Services, on par with the sovereign ratings of the Hong Kong SAR Government.
HSBC, Bank of America Merrill Lynch and Goldman Sachs (Asia) acted as joint bookrunners and lead managers for the bond issue.