Fewer Hong Kong seniors buy Silver Bonds in latest US$6.4 billion sale
Investors bid to buy 1.4 times more bonds than the government offers, but application numbers and total bid amount decline from last year
Investors submitted about 300,100 bids for HK$70.16 billion worth of bonds during the offering period, which started on September 30 and ended on Monday at 2pm, a government spokesman said.
The number of applications dropped 7.7 per cent compared with last year’s 326,000, while the total bid amount fell 2.8 per cent short of last year’s total of HK$72.18 billion, which was a record high. The sale, however, exceeded the offering in 2022, when 290,000 senior citizens lodged HK$62.64 billion worth of bids for the bonds, which are exclusively for investors aged 60 and above.
Given the enthusiastic response, the government is expected to increase the final issue size to the upper limit of HK$55 billion. The Hong Kong Monetary Authority (HKMA) will announce the final allotment results on October 21.
The ninth annual offering of the bonds marks the first time they have been issued under the government’s infrastructure bond framework, which analysts said is a selling point because it gives the public a chance to invest in infrastructure projects.
The proceeds of the bonds will be used to finance projects including the Central Kowloon Route, the Hung Shui Kiu development in Yuen Long and drainage improvement works in Wong Tai Sin.
The latest batch of Silver Bonds has a three-year tenor with a guaranteed annual coupon of 4 per cent, lower than last year’s 5 per cent but in line with the batch in 2022.
