Guangdong moves ahead with the third bond issuance in Macau later this month

The People’s Government of Guangdong Province will issue offshore bonds for the third consecutive year, the local government has announced.

According to a government statement, the new issuance “showcases the Central government and the Guangdong government’s support for Macau’s efforts to develop a modern financial industry,” as well as, “a recognition of Macau’s function as a green-financing platform.”

The first and second issuance in Macau of the Guangdong government offshore renminbi-denominated bonds happened respectively in October 2021 and October 2022.

In the third issuance, the Guangdong government will issue in Macau, by the end of this month, two tranches of offshore renminbi-denominated provincial government bonds. On aggregate, it is expected that the issued principal amount will reach RMB2 billion.

One of the batches proposed will have a two-year maturity, while the second will have a three-year maturity. The last will be designated a “green” bond, which is the first time  this type of bond will be issued locally. Both will be available to institutional investors.

According to the same local government statement, the continuous issuance of bonds in Macau will promote relationships between local financial services and those of the Guangdong-Hong Kong-Macau Greater Bay Area.

Local authorities are also said to be working to optimize local infrastructure and resources to support a financial market, including enhancing the Macao Central Securities Depository system as well as related laws and regulations for a bond market.

Concurrently, the government is also working on making the issuance of treasury bonds and provincial-government bonds a routine practice and encouraging a greater number of institutions to carry out investment and financing activities in Macau.