China’s Ministry of Finance ( MoF ) on Thursday ( May 28 ) issued its second offshore yuan-denominated sovereign green bond in Hong Kong to raise 6 billion yuan ( US$885 million ).

The sale, arranged in two equal tranches with three-year and five-year maturities, saw strong demand from global investors, with the combined order books exceeding 10 times the target, reaching 61 billion yuan, on the same day. The final order book was 62.4 billion yuan.

The initial price guidance for the three-year tranche was 1.85%, while that for the five-year tranche was 2%. In view of the huge oversubscription, however, the final price guidance narrowed to 1.42% and 1.56%, respectively.  By comparison, the yields for the three-year and five-year China onshore government bonds were 1.26% and 1.43%, respectively.

Proceeds from the latest issuance will be fully used to finance and/or refinance eligible green expenditures from MoF’s fiscal budget in accordance with China’s sovereign green bond framework.

Acting as joint lead managers on the deal were Bank of China, Bank of Communications, Barclays, China International Capital Corporation, CITIC Securities, Crédit Agricole CIB, HSBC, ICBC, and Standard Chartered. Crédit Agricole and Bank of China acted as green structuring advisers, while Lianhe Green Development and DNV Business Assurance provided second-party opinions.

The debt issuance attracted a geographically diverse investor base, with the Asia-Pacific region securing 80% of the allocation and non-Asia-Pacific markets taking the remaining 20%. By institution type, banks led participation at 47%, followed by sovereign and supra-sovereign entities at 31%, and fund managers and insurance investors at 20%.

The MoF debuted as a sovereign green bond issuer in April 2025, when it priced a 6 billion yuan offshore yuan-denominated sovereign green bond in London. It was oversubscribed 6.9 times. Proceeds from this inaugural sovereign green bond were allocated to 1,096 pollution-prevention projects in China, according to a disclosure report.

Green bond remains a critical financing tool underpinning the country’s decarbonization and energy transition. China has become the world’s second-largest green bond issuer after the United States by total volume. In 2025, China issued 647 green bonds totalling 1.07 trillion yuan in the onshore market, according to data from China Chengxin Green Finance.