AIIB’s HKD & GBP Bond Success Signals Bold Funding Shift & Non-USD Credibility

The Asian Infrastructure Investment Bank (AIIB) is reaffirming its strategic objective to deepen presence in non-USD funding markets through its recent acquisitions. The successful HKD ‘Wonton’ bond issuance demonstrates both the potential and evolving liquidity of the Hong Kong dollar public bond market for AAA-rated supranationals. Pricing at mid-swap +0bps suggests lenders accepted no premium over expected HKD benchmarks, a strong signal in favour of AIIB’s credit and market confidence. Meanwhile, its return to the sterling market with a large, oversubscribed GBP deal anchored by UK and EMEA demand underscores its portfolio of funding channels outside the USD spectrum.

Use of the ‘Wonton’ format—public-format HKD denominated and settled through CMU—is significant. AIIB’s precedent in February 2025 established this format; since then over HKD 20 billion in Wonton issuance has followed from multilateral development banks, indicating a growing marketplace and a benchmark being established. The fact that AIIB chose to issue its second Wonton bond at the same size as its inaugural one (HKD 4 billion) suggests it is calibrating size to market and portfolio periods rather than stretching the envelope. AIIB’s mention that demand could have supported more, but size “best fits our 2026 issuance plan”, suggests careful pacing to avoid saturating the credit curve and maintaining tight spreads.

From investor allocation data, the HKD trade was heavily anchored by local bank treasuries (78%) and local-region investors (88%), while central banks/official institutions played a larger role in the GBP issuance. This suggests the HKD ’Wonton’ format is still relatively localized in demand, although useful as a diversification tool for local liquidity providers. The GBP issuance, instead, confirms AIIB’s strong standing in global public markets, especially in Europe. Its 3.2× oversubscription and being the largest GBP benchmark for AIIB reinforce market credibility.

Strategic implications: AIIB is executing a diversified funding strategy, reducing dependency on USD markets. The timing is favorable—current interest rate environments in USD, GBP, and HKD, along with demand for sustainable development and ESG-labelled bonds, are enabling effective relative cost of funds. For investors, this creates opportunities for exposure to AAA-rated international issuers via non-USD markets, with potential yield or spread advantages. However, key open questions remain: whether AIIB can scale up Wonton issuance size without materially increased spread or risk; how HKD liquidity will perform under stress; and whether similar demand holds for longer tenors in Wonton format or for other regional currencies.