Hong Kong Monetary Authority Reveals Results of 2-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 results of the recent tender for 2-year RMB institutional Government Bonds. The tender, part of the Infrastructure Bond Programme, was conducted on November 14, 2024, offering a total of RMB1.0 billion in bonds, according to the Hong Kong Monetary Authority.

High Demand for Government Bonds

The tender attracted significant interest, with RMB5.409 billion in applications received, resulting in a robust bid-to-cover ratio of 5.41. This ratio indicates the strong demand for these bonds, as the amount applied for was over five times the amount issued. The bonds were issued under the stock code 84585 (HKGB2.04 2611-R) and are set to mature on November 18, 2026.

Yield and Pricing Details

The average price accepted for the bonds was 99.98, which corresponds to an annualized yield of 2.062%. The lowest price accepted was 99.82, yielding 2.144%. The pro-rata allocation ratio stood at approximately 62%, highlighting the competitive nature of the tender process. The average tender price was recorded at 99.64, equating to a yield of 2.240%.

Bond Characteristics

The bonds carry a coupon rate of 2.04% and are set to be issued and settled on November 18, 2024. These bonds are part of the HKSAR Government's ongoing efforts to develop the RMB bond market and provide institutional investors with more investment options.

The HKMA's successful bond issuance underscores the continued confidence in Hong Kong's financial stability and the appeal of RMB-denominated assets amidst global economic uncertainties.