Hong Kong’s Silver Bonds lure senior citizens as government promises to pay seven times more than banks in annual interest
- Subscriptions for the inflation-protected bonds this year far exceed that recorded for four previous issues
- The product is available to those born in or before 1956, and pays as much as 3.5 per cent coupon annually
Investors bid for HK$43.3 billion (US$5.6) worth of Silver Bonds, far exceeding the bids for its previous four issues carrying 2 to 3 per cent coupon sold from 2016 to 2019, according to preliminary results released by the government on Friday. The government will sell HK$15 billion of them, raising the size from an initial HK$10 billion. Subscriptions ended at 2pm local time on Friday.
About 140,000 people applied for the bonds, which are meant for permanent residents born in or before 1956. In comparison, about 56,600 applicants subscribed for HK$7.9 billion worth of the bonds last year.
“Customers have showed a keen interest in the latest tranche of Silver Bonds, evidenced by the new record achieved,” HSBC, which is the joint lead manager with Bank of China (Hong Kong), said in a statement on Friday. The total subscriptions received were about five times that of 2019, it said.
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The amount of subscriptions recorded by BOCHK also quintupled from last year, while the total number of applicants also doubled, it said in a statement. Each applicant subscribed for about 30 lots, with each lot amounting to HK$10,000.
