The inaugural issue of Hong Kong government bonds under the Institutional Bond Issuance Programme was well received by institutional investors, the SAR authorities have announced.
A total of HKD3.5bn (USD450m) two-year government bonds were offered, with a coupon of 0.92% and a maturity of September 5, 2011.
The issue was well received by retail investors, with a total application amount of HKD22.58bn – 6.45 times the offered amount.
The bonds will constitute direct, unsecured, unconditional and general obligations of the Hong Kong government, and will rank pari passu with all of its other unsecured indebtedness. They are exempt from profits tax and stamp duty in Hong Kong and will be listed on the Hong Kong Stock Exchange.
This is the first institutional bond issuance under the government bond programme, after the relevant resolutions were passed by the Legislative Council on July 8 2009.
Hong Kong’s Financial Secretary, John Tsang, observed that: “The positive response to the tender for government bonds under the Institutional Bond Issuance Programme reflects strong demand from institutional investors for public debt instruments."
"As we have always emphasised, the aim of the government bond programme is to promote the further and sustainable development of the local debt market, making our debt market an effective channel of financial intermediation. This would help further enhance financial stability and strengthen Hong Kong’s position as an international financial centre.”
“By ensuring an on-going supply of government bonds denominated in Hong Kong dollars under the Institutional Bond Issuance Programme,” he added, “more institutional investors would be interested and able to participate in the local debt market, increasing the depth and breadth of our market.”
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