Hong Kong Monetary Authority Reveals Results of 10-Year RMB Bond Tender

The Hong Kong Monetary Authority (HKMA), acting on behalf of the Hong Kong Special Administrative Region Government (HKSAR Government), has announced the successful completion of a tender for 10-year RMB institutional government bonds. The tender, held on November 14, attracted significant interest, with applications amounting to RMB4.361 billion, according to Hong Kong Monetary Authority.

Details of the Bond Issuance

The tender offered a total of RMB1.5 billion in bonds under the issue number 10GB3411001, as part of the Infrastructure Bond Programme. The bid-to-cover ratio stood at 2.91, highlighting robust demand for these government securities. The average accepted price was 100.18, corresponding to an annualized yield of 2.454%.

Tender Specifications

The bonds, identified by the stock code 84586 (HKGB2.46 3411-R), will have an issue and settlement date of November 18, 2024, and a maturity date of November 20, 2034. They offer a coupon rate of 2.46%, with a pro-rata ratio of approximately 81% for those bids that were partially accepted.

Market Implications and Context

This bond issuance comes at a time when the Hong Kong bond market is witnessing growing interest from both local and international investors. The high bid-to-cover ratio suggests strong confidence in Hong Kong's fiscal stability and the attractiveness of RMB-denominated assets. This issuance aligns with the HKMA's ongoing efforts to bolster Hong Kong's status as a leading financial hub in Asia.

The lowest accepted price of the tender was 99.44, yielding 2.540%, while the average tender price was recorded at 98.81, corresponding to a yield of 2.613%. These results indicate a competitive bidding environment, reflective of the strategic importance of the bonds within the broader market.

Overall, the successful tender of these bonds underscores the HKMA's capability to manage and issue government securities effectively, further contributing to the financial robustness and market confidence in Hong Kong's economic policies.