Hong Kong to Re-Open 10-Year RMB Bonds with February Tender

The Hong Kong Monetary Authority (HKMA), acting on behalf of the Hong Kong Special Administrative Region Government (HKSAR Government), has announced the re-opening of 10-year RMB HKSAR Government Bonds. According to the Hong Kong Monetary Authority, the tender is scheduled for February 13, 2025, with settlement expected on February 17, 2025.

Details of the Bond Offering

The tender will offer an additional RMB1.0 billion of the existing 10-year Government Bond issue, numbered 10GB3411001. These bonds, part of the Infrastructure Bond Programme, have a maturity date of November 20, 2034, and an annual interest rate of 2.46%, payable semi-annually. The indicative pricing as of February 7, 2025, stands at 100.47 with a semi-annualized yield of 2.406%.

Participation and Tender Conditions

Participation in the tender is limited to Primary Dealers under the Infrastructure Bond Programme. Interested parties must apply through these dealers, with each tender amounting to RMB50,000 or its multiples. Tender results will be disseminated via the HKMA's website, the Hong Kong Government Bonds website, Bloomberg, and Refinitiv by 3:00 pm on the day of the tender.

Accrued Interest and Investment Framework

Successful bidders will pay accrued interest of RMB306.66 per minimum denomination of RMB50,000 on the issue date. The proceeds from these bonds will be used for infrastructure projects, in line with the Infrastructure Bond Framework outlined on the Hong Kong Government Bonds website.

Market Implications

This bond issuance is expected to bolster Hong Kong's infrastructure funding. The bonds are fully fungible with the existing issue 10GB3411001, listed on the Stock Exchange of Hong Kong under stock code 84586. The re-opening aligns with Hong Kong's strategic focus on enhancing its infrastructure capabilities through sustainable financial instruments.