Hong Kong’s infrastructure bond reopening on Oct. 21 drew HK$3.537 billion in bids, less than half July’s amount, while the average accepted auction yield rose to 3.821%.
The Hong Kong Monetary Authority (HKMA) allotted the full HK$750 million offered on behalf of the Hong Kong Special Administrative Region Government. Bids covered the allotment 4.72 times, compared with 10.00 times when the same bond was reopened on July 22.
At the July auction, investors applied for HK$7.50155 billion of bonds against an offer of HK$750 million. The average accepted yield then was 3.137%. The two results show lighter bidding and a higher auction yield in October, with the amount offered unchanged.
The average accepted price in October was 98.38. The lowest accepted price was 98.24, which implied an annualized yield of 3.870%. The HKMA reported a pro-rata ratio of about 23%.
The auction yield is distinct from the bond’s fixed 3.23% annual coupon. First issued in December 2024 as a five-year bond, the security matures Dec. 5, 2029. The HKMA offered the latest reopening as a three-year issue because about 3.12 years remained before maturity.
Appointed primary dealers could bid directly at the October tender, while other applicants could place bids through them. The HKMA said proceeds would go to infrastructure projects under Hong Kong’s Infrastructure Bond Framework. It says the broader program is intended to meet the cash-flow needs of major projects and support their earlier completion.
Settlement for the October allotment is scheduled for Oct. 22.
