HKMA Announces Results of 3-Year HKD Government Bond Tender

The Hong Kong Monetary Authority (HKMA), acting on behalf of the Hong Kong Special Administrative Region Government (HKSAR Government), has released the results for the tender of its 3-year HKD institutional government bonds. This tender, part of the Infrastructure Bond Programme, took place on October 23, 2024, according to the Hong Kong Monetary Authority.

Details of the Bond Issuance

The HKMA offered a total of HK$5.5 billion in 3-year government bonds. The bonds, identified by issue number 03GB2710001, attracted significant interest, with applications amounting to HK$21.375 billion. This demand resulted in a bid-to-cover ratio of 3.89, indicating strong investor interest.

The average price accepted for these bonds was 99.89, translating to an annualized yield of 2.952%. The lowest price accepted was 99.75, with a yield of 3.000%. The average tender price stood at 99.30, resulting in a yield of 3.160%.

Key Dates and Financial Details

The bonds, carrying a coupon rate of 2.89%, have an issue and settlement date of October 24, 2024, and will mature on October 25, 2027. The stock code for these bonds is 4283 (HKGB 2.89 2710).

A pro-rata ratio of approximately 99% was applied, ensuring equitable distribution among the successful applicants. The substantial interest in this tender reflects confidence in the Hong Kong government’s financial instruments.

Context and Implications

This bond issue forms part of the broader strategy by the HKMA to manage the region's financial stability and liquidity. The strong demand and favorable yield underscore investor confidence in Hong Kong's economic outlook despite global financial uncertainties.

Additionally, the successful tender aligns with the HKSAR Government's objectives to support infrastructure projects through strategic bond issues, providing a stable financial foundation for future development.