Hong Kong outlines grant for first-time corporate bond issuers and plans for green bonds in budget
Government to launch HK$2.5 million pilot bond grant scheme to develop market, as well as a green bond issuance programme of up to HK$100 billion
The Hong Kong government announced a package of measures to develop the city’s bond market, including green bonds, in its 2018-19 budget on Wednesday.
To attract more first-time corporate issuers from China and the more than 60 countries covered by the Belt and Road Initiative, the government said it would launch a HK$2.5 million (US$319,428) three-year pilot bond grant scheme that will seek to cut issuer expenses by half.
The pilot scheme will cover eligible enterprises issuing bonds for the first time in Hong Kong. However, each company can apply for a grant for two bond issuances at most.
A government source told the South China Morning Post the upper grant limit was set after taking into consideration a similar grant scheme launched by Singapore in June 2017.
“We hope to further expand the bond market in Hong Kong. We believe the HK$2.5 million bond grant is pretty competitive. Our incentive is a bit higher than the S$400,000 (US$302,341) bond grant offered by the Singaporean government,” the source said.
Singapore’s central bank launched the grant last year to encourage the use of credit ratings by issuers in the Singapore dollar bond market. Issuers of Singapore dollar bonds can claim 100 per cent of their credit rating expenses up to the limit of S$400,000.