Lingang Group, a Shanghai-based State-owned enterprise, issued an 800 million yuan ($110.06 million) offshore renminbi social bond, marking a historic milestone in sustainable finance. The bond, the first of its kind issued by a non-financial corporate, was listed on both the Hong Kong Stock Exchange (HKEX) and the Luxembourg Stock Exchange (LuxSE), on June 26.

Acting as joint global coordinators for the three-year bond, Morgan Stanley and HSBC orchestrated the bond's issuance. Priced at a competitive 3.15 percent, the bond witnessed overwhelming demand, with subscriptions surpassing expectations by 3.5 times. Notably, this issuance set a new benchmark by achieving the lowest coupon rate for a Chinese non-financial corporate bond with a similar maturity in the past decade.

A standout feature of Lingang Group's offering was its approach to sustainability and transparency. After engaging with Moody's and United Nations Green Development, two overseas environmental, social, and governance (ESG) evaluation agencies, the group obtained second-party opinions on its sustainable financing framework, underscoring its commitment to responsible business practices. Additionally, Morgan Stanley played a pivotal role as the exclusive advisor on the sustainable development financing framework structure for the bond.

The bond's investor base reflects a diverse participation from around the globe, with over 33 percent comprising institutional investors from outside China. This includes non-bank asset management firms and funds, which collectively accounted for 39 percent of the bond's subscriptions. This level of international interest far exceeds that of similar bonds issued during the same period, underscoring Lingang Group's appeal to a broad spectrum of investors.

The proceeds from the bond issuance are earmarked for qualified green and social responsibility projects that focus on initiatives such as affordable housing and basic infrastructure development. Notably, a substantial portion of the funds, totaling 700 million yuan, will be allocated to the development of subsidized rental housing in Shanghai. This particular project is set to benefit over 15,000 employees and contribute to the city's sustainable urban development.

Lingang Group, renowned for its contributions to park development, enterprise services, and industrial investment, has played a pivotal role in the transformation of Shanghai's regional landscape, such as Lin-gang Special Area, since its inception in 2003.

The issuance of this offshore RMB social bond underscores the group's commitment to sustainable finance and highlights the importance of the offshore RMB bond market, which plays a vital role in facilitating RMB financing, issuance and investment transactions outside China. Hong Kong boasts the largest offshore RMB bond market globally.