The Hong Kong Mortgage Corporation (HKMC) has issued its maiden multi-currency native digital bonds worth around HKD12 billion (USD1.5 billion) in the largest such global issuance. Clifford Chance and Linklaters provided legal support on the transaction.
Wholly owned by the Hong Kong government through the Exchange Fund, the HKMC is a public-sector institution that provides mortgage lending, debt securities, financial guarantee and retirement annuity services to local residents, investors and businesses. The offering also marks the first digital bond issuance by Hong Kong’s public sector.
Clifford Chance advised the HKMC on English and Hong Kong law, led by partner Mark Chan, with support from counsel Torrance Shi.
In an HKMC announcement, Howard Lee, deputy chief executive of the Hong Kong Monetary Authority (HKMA) and HKMC executive director, said: “This landmark digital bond issuance helps deepen Hong Kong’s digital asset ecosystem and accelerate the adoption of tokenisation technology in the fixed-income market.”
The issuance comprises three tranches: a two-year HKD6 billion bond with a coupon of 3.355%, a five-year HKD2.5 billion bond carrying a coupon of 3.431%, and a three-year RMB3 billion bond with a 1.7% coupon.
All three tranches were issued in a native digital format on HSBC Orion, a distributed ledger technology platform operated by the HKMA’s Central Moneymarkets Unit, and were listed on the HKEX.
The issuance was part of its USD30 billion medium-term note programme, the HKMC announcement said.
A total of 16 international and local financial institutions acted as joint lead managers for the transaction, including Bank of China (Hong Kong), Crédit Agricole, HSBC, JPMorgan, Standard Chartered Bank and ICBC (Asia). HSBC also acted as the fiscal agent and principal paying agent.
Linklaters counselled the joint lead managers and the agent on English law. Partner Yu Hanwen led the transaction team, with counsel Grace Wee participating. Counsel Ding Beibei led a separate capital markets team, advising the fiscal agent.
