The Hong Kong Monetary Authority (HKMA) allotted HK$1.25 billion in a seven-year bond reopening Wednesday, with tender demand above July’s level but below April’s.
Acting for the Hong Kong Special Administrative Region Government, the HKMA said applications totaled HK$6.693 billion against HK$1.25 billion offered. The bid-to-cover ratio was 5.35, comparing applications with bonds issued. The tender was limited to primary dealers appointed under the Infrastructure Bond Programme.
Coverage was higher than the 4.91 recorded when the same issue reopened in July, but lower than April’s 6.12. At the April sale, HK$7.655 billion in applications competed for an identical HK$1.25 billion allotment. Accepted bids then averaged a 2.656% annualized yield; the average accepted price was 101.68.
For Wednesday’s tender, successful bids averaged a price of 95.77, associated with a 3.708% annualized yield. The lowest accepted price was 95.44, at a 3.771% yield. Across all tender bids, the average price was 95.04, with a 3.847% yield. The pro-rata allocation ratio was about 10%.
The reopened security was issue 07GB3302001, stock code 4201, listed as HKGB 2.91 3302. It carries a 2.91% annual coupon paid semiannually and matures Feb. 7, 2033. Government records listed HK$4.25 billion of the issue outstanding as of Oct. 26.
The Infrastructure Bond Programme helps the government manage funding for major infrastructure work. Bond proceeds go to the Capital Works Reserve Fund, which finances government infrastructure projects. The tender results did not specify allocations to individual projects.
The HKMA had scheduled the reopening for Nov. 11. The full HK$1.25 billion was allotted, with issuance and settlement scheduled for Nov. 12.
