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

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 under Project Evergreen, 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. The bonds are cleared and settled through the Hong Kong Monetary Authority’s Central Moneymarkets Unit (CMU), which is linked to Euroclear and Clearstream, enabling investor access through established international market infrastructure. The proceeds will be used to finance or refinance eligible projects under the HKSAR Government’s Green Bond Framework.

Building on the HKSAR Government’s three successful digital green bond issuances since 2023, the latest offering incorporates tokenised deposits, empowered by Ensemble TX, into the primary issuance settlement process for the Hong Kong dollar tranche, alongside traditional settlement rails and the tokenised central bank money option introduced in the previous issuance. It is the world’s first digital bond to integrate tokenised deposits in Hong Kong dollars, advancing towards a more integrated digital ecosystem and laying a foundation for exploring the programmable features of digital money.

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 issuances under Project Evergreen, we have seen each transaction build on the last to advance the practical application of bond tokenisation. This latest issuance is particularly significant for its scale and the integration of tokenised deposits into the settlement process, demonstrating how digital bonds are evolving towards broader market adoption. 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 deployed by HSBC to the CMU as the platform operator for the purposes of, among other things, recording, clearing and settling the digital green bonds.