Investors will be awarded a record maximum of 23 board lots of the eighth batch of Silver Bond after seeing all-time high numbers of subscriptions both in terms of amount and applications, the government announced yesterday.
A total of 323,783 valid applications were received at the close of the subscription period on August 9, involving a total of HK$71.7 billion in principal, according to the statement.
That marks a more than 10 percent increase in the number of subscribers from last year's issuance and a 0.3 times oversubscription for the bond. The final issuance amount has been raised to HK$55 billion from HK$50 billion due to the warm response received.
The 202,477 applicants who sought 22 or fewer lots will be allocated the full amounts applied for, while the remaining 121,306 will get 22 each and then entered into a ballot to decide who would be one of the 89,984 individuals that can subscribe for one additional lot.
The three-year bond, which will be issued tomorrow, has an interest rate of 5 percent, higher than the 4 percent rate of the previous issuance.
Interest will be paid once every six months and there will be no secondary market. Bondholders can sell their holdings before maturity to the government at par together with accrued but unpaid interest.
Financial Secretary Paul Chan Mo-po said the record subscription numbers showed that the silver bonds continue to be well-received by senior residents.
He said they can "provide a stable investment option with attractive returns for senior residents, rendering financial services more inclusive and better serving the needs of the public and the community."
Many local banks and brokerages, including the Hongkong and Shanghai Banking Corporation, offered a number of fee waivers for subscribers of the bond, like the subscription handling fee, transfer-in fee, safe custody fee, interest collection fee, early redemption fee and redemption fee at maturity.
Meanwhile, China Citic Bank International said silver bond investors can enjoy a 4.68 percent time deposit rate for a six-month deposit or a 4.28 percent rate for a 12-month deposit if they place at least HK$10,000 of the refund from the bond subscription via its branches before the end of this month.
The bonds offer a stable investment option. Sing Tao
