Hong Kong's government has announced the details for its latest batch of Silver Bonds, with a target issuance size of HK$50 billion. Subject to subscription demand, the issuance can be increased to a maximum of HK$55 billion.
Each bond has a face value of HK$10,000, a three-year tenor, and pays interest semi-annually. The interest rate is linked to local inflation, with a guaranteed minimum rate of 4.25% for this issuance. This rate is higher than the 3.85% guaranteed rate on the previous batch of Silver Bonds.
The subscription period runs from 9:00 AM on August 21 to 2:00 PM on September 4. The allotment results are scheduled to be announced on September 11, with the bonds set to be issued on September 15. Eligible Hong Kong residents holding a valid Hong Kong Identity Card and born in 1967 or earlier can apply through designated banks or licensed securities brokers.
Regarding the allotment mechanism, the government will employ a cyclical allocation process, with each investor eligible for a maximum allotment of 100 bonds. There is no secondary market for Silver Bonds, and they will not be listed on any stock exchange. Investors can sell the bonds back to the government before maturity, and the government will redeem them at face value along with the corresponding accrued interest.
Hong Kong's Financial Secretary, Paul Chan, stated that the government continues to issue Silver Bonds this year, offering seniors a safe, stable, and low-risk investment option. He also encouraged the financial industry to seize the opportunities presented by the silver economy. This batch of Silver Bonds is issued under the Infrastructure Bond Programme, with proceeds used to fund public works projects. This aims to advance Hong Kong's infrastructure and city development, improving residents' quality of life while allowing them to participate and benefit from these projects.
Data shows that Silver Bonds are government retail bonds that Hong Kong has been issuing since 2016 for senior citizens. This will be the 11th batch of Silver Bonds issued up to 2026. The Silver Bonds issued in 2023 offered a record-high guaranteed rate of 5%, while the new batch's guaranteed rate of 4.25% marks the second highest in the program's history.
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