Hong Kong's government unveiled the 11th Silver Bond issuance on Thursday, with a 4.25 percent interest rate floor - the second-highest on record.
Subject to market response, the government may exercise discretion to increase the issuance size to a maximum of HK$55 billion from the original HK$50 billion target.
The three-year bond's semi-annual interest payments are tied to the city's average annual inflation rate, subject to the minimum interest rate. The latest interest rate floor is just below the record-high 5 percent rate in 2023 and also higher than that of 3.85 percent last year.
Each eligible investor, who was born in 1967 or earlier holding a valid Hong Kong identity card, will be allowed to subscribe for up to 100 board lots, with each board lot costing HK$10,000.
Applications will run from August 21 to September 4. It's expected to post the allocation results on September 11 and launch the bond issuance on September 15.
The bonds will not be listed on any exchange or traded in a secondary market, while investors may sell the bond back to the government before maturity by requesting an early redemption, said Christopher Hui Ching-yu, Secretary for Financial Services and the Treasury.
Financial Secretary Paul Chan Mo-po noted that the government continues to issue silver bonds this year, providing a safe, steady and low-risk investment product to local senior investors.
The government also encourages financial institutions to tap into the immense potential of the silver market, he added.
The 11th batch of silver bonds will be issued under the infrastructure bond framework, and proceeds will be used to fund public works projects, aiming to enhance Hong Kong's infrastructure and city development, Chan said.
