Hong Kong will auction RMB1.5 billion of an existing 10-year government bond on Thursday, Nov. 12, directing proceeds to infrastructure finance, with settlement due four days later.
The Hong Kong Monetary Authority (HKMA), acting for the Hong Kong Special Administrative Region government, will sell the additional bonds as a reopening of issue 10GB3505001 under the Infrastructure Bond Programme.
The bond matures May 15, 2035, and pays a 2.29% annual coupon in two installments each year. In its Nov. 6 indicative pricing, the HKMA quoted 104.18, corresponding to a 1.760% semiannualized yield. The indicative figure precedes the tender, with final results expected on the sale date.
Direct bidding is limited to primary dealers appointed by the HKMA. Other applications must be submitted through a primary dealer in amounts of RMB50,000 or multiples of that sum.
The programme framework allows bond proceeds to finance or refinance projects in the government's Capital Works Programme. It bars projects included, or expected to be included, in the Government Sustainable Bond Programme. The HKMA has not named specific projects or beneficiaries for this reopening. Hong Kong Government Bonds says the programme was established to manage cash-flow needs for major infrastructure projects and help bring their completion forward.
At the previous reopening of this bond on July 23, the offer was RMB1.25 billion and applications reached RMB10.81 billion. That amounted to 8.65 times the amount offered, according to the HKMA's tender results. The average accepted price was 104.42, corresponding to a 1.746% semiannualized yield and a 1.754% annualized yield.
The current tender is scheduled for Thursday, Nov. 12, and settlement is set for Nov. 16.
