HKMA Announces Results of 1-Year RMB Government Bond Tender

HKMA Conducts Successful Bond Tender

The Hong Kong Monetary Authority (HKMA), representing the Hong Kong Special Administrative Region Government (HKSAR), has announced the results of a recent tender for 1-year RMB Institutional Government Bonds. This event, held on December 5, 2024, was part of the Infrastructure Bond Programme, showcasing significant investor interest and competitive pricing, according to the Hong Kong Monetary Authority.

Details of the Tender

During the tender, bonds amounting to RMB1.5 billion were offered. The total tender applications reached RMB6.258 billion, resulting in a bid-to-cover ratio of 4.17. This ratio indicates the high demand for these bonds, as investors applied for more than four times the amount issued. The average price accepted was 100.33, translating into an annualised yield of 2.055%.

Bond Specifications

The bonds, identified by the issue number 01GB2512001 and stock code 84595 (HKGB2.38 2512-R), are set to be issued and settled on December 9, 2024, with a maturity date of December 9, 2025. They carry a coupon rate of 2.38%, offering investors a stable return.

Comparative Analysis

The tender's lowest and average prices both stood at 100.33, indicating a consistent yield of 2.055%. The pro-rata ratio was approximately 96%, and the average tender price yielded 2.214%, slightly higher than the accepted yield. This outcome reflects favorable market conditions and investor confidence in the HKSAR government's fiscal stability.

Context and Implications

This bond issuance is part of Hong Kong's ongoing efforts to bolster its financial infrastructure and provide investors with secure investment options in RMB-denominated assets. The strong demand for these bonds underscores the confidence in Hong Kong's economic environment and its strategic position in the global financial landscape.