HKMA Announces Results of 5-Year RMB Government Bonds Tender

The Hong Kong Monetary Authority (HKMA), acting on behalf of the Hong Kong Special Administrative Region Government (HKSAR Government), has disclosed the results of a recent tender for 5-year RMB institutional government bonds. The tender, held on December 5, 2024, offered RMB1.0 billion worth of bonds under the Infrastructure Bond Programme, as reported by the Hong Kong Monetary Authority.

Tender Overview

The tender attracted applications totaling RMB3.028 billion, reflecting a bid-to-cover ratio of 3.03. This ratio indicates the level of demand relative to the supply of the bonds offered. The bonds were issued at an average accepted price of 100.60, translating into an annualized yield of 2.255%.

Bond Details

The issued bonds, identified by the stock code 84596 (HKGB2.37 2912-R), have an issue and settlement date set for December 9, 2024, with a maturity date of December 10, 2029. The coupon rate for these bonds is set at 2.37%.

The tender results further highlighted that the lowest price accepted was 100.40, corresponding to a yield of 2.298%, while the average tender price was 100.18, equating to a yield of 2.345%. The pro-rata ratio for the tender was approximately 1%.

Significance of Results

The successful issuance of these bonds underscores strong investor confidence in the financial instruments offered by the HKSAR Government. The competitive bid-to-cover ratio and favorable yield reflect the robust demand for RMB-denominated government bonds, which are seen as a stable investment option amidst varying global economic conditions.

The HKMA continues to play a pivotal role in managing the region's monetary and financial stability, with bond offerings being a critical component of its strategy to enhance liquidity and provide funding for infrastructure projects within Hong Kong.