Timothy Morano
Mar 05, 2025 01:38
The Hong Kong Monetary Authority announced the results of a tender for 20-year HKD institutional government bonds, revealing a bid-to-cover ratio of 4.50 and an annualized yield of 3.851%.
The Hong Kong Monetary Authority (HKMA), acting on behalf of the Hong Kong Special Administrative Region (HKSAR) Government, has disclosed the outcomes of a tender for 20-year HKD institutional government bonds. This tender, part of the Infrastructure Bond Programme, was conducted on March 5, 2025, according to the HKMA.
Tender Details and Results
The HKMA offered a total of HK$0.5 billion in 20-year government bonds, with applications amounting to HK$2.248 billion, indicating a significant interest from investors. The bid-to-cover ratio, which measures the number of bonds applied for relative to the bonds issued, stood at an impressive 4.50. Bonds were accepted at an average price of 102.44, translating to an annualized yield of 3.851%.
Bond Specifications
The bonds issued, under the issue number 20GB4503001 and stock code 4290 (HKGB 3.99 4503), are set for issue and settlement on March 6, 2025. The bonds will mature on March 6, 2045, carrying a coupon rate of 3.99%. The lowest price accepted for the bonds was 101.62, equating to a yield of 3.910%, while the average tender price was 99.13, resulting in a yield of 4.095%. The pro-rata ratio, which indicates the portion of the bonds allotted to applicants, was approximately 39%.
Market Context
This tender result comes amidst a backdrop of heightened investor interest in long-term government securities, as market participants seek stability and predictable returns in uncertain economic conditions. The robust bid-to-cover ratio underscores confidence in the HKSAR’s fiscal health and its ability to manage long-term debt obligations.
The HKMA’s successful bond issuance aligns with its broader strategy to fortify Hong Kong’s financial infrastructure and provide a stable platform for institutional investors. This move is part of a continuing effort to enhance the region’s appeal as a global financial hub.
Further details on the tender results can be accessed on the Hong Kong Monetary Authority website.
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