The Hong Kong Monetary Authority (HKMA) will offer HK$1.25 billion of a seven-year government bond in a tender Wednesday, Nov. 11, with proceeds designated for infrastructure projects under Hong Kong’s Infrastructure Bond Programme.
The reopening covers issue 07GB3302001, listed under stock code 4201, and settlement is scheduled for Thursday, Nov. 12. The bond matures Feb. 7, 2033. The HKMA’s Nov. 5 notice listed an indicative price of 96.53 and an annualized yield of 3.563%; both figures are dated indications ahead of the tender. The coupon is 2.91% a year, with interest paid twice annually in arrears. Payments are listed for Feb. 5 and Aug. 5, subject to adjustments under the information memorandum.
The government’s framework allows the proceeds to finance or refinance eligible projects in the Capital Works Programme. Its stated categories include ports and airports, buildings, drainage, highways, waterworks and housing. Projects included, or expected to be included, in the Government Sustainable Bond Programme are excluded.
Access is restricted to institutions on the programme’s Primary Dealer roster. A tender must pass through a rostered dealer, and its value must be HK$50,000 or a whole-number multiple. On settlement day, successful bidders owe HK$394.64 in accrued interest for each HK$50,000 denomination; the amount for larger bids may differ because of rounding.
The government’s register listed HK$4.25 billion of this issue outstanding as of Oct. 26. At its April 22 reopening, the government offered HK$1.25 billion and received HK$7.655 billion in tender applications. The bid-to-cover ratio was 6.12, and the average accepted annualized yield was 2.656%. The HKMA’s results also listed an average accepted price of 101.68.
A results notice is expected on Wednesday, Nov. 11. The HKMA says results will be available through its website, the Hong Kong Government Bonds website, Bloomberg and Refinitiv.
