June Chen

Hong Kong's latest retail infrastructure bond offering got off to a strong start yesterday with investors seeking between 5 and 15 board lots and banks doing brisk business for the bonds.

The target size of the retail infrastructure bond is HK$20 billion, with each lot offered at HK$10,000 and a tenor of three years.

Interest will be paid semi-annually at a rate linked to inflation in Hong Kong, subject to a minimum of 3.5 percent.

The average subscription amount per order received by China Citic Bank International yesterday was HK$150,000, 25 percent higher than last year.

The Hongkong and Shanghai Banking Corporation and Bank of China (Hong Kong) (2388) said it saw a positive response for the bonds with the average subscription amount per order received yesterday being higher than the level of the first day of book-building for last year's retail green bond offering.

The bank offers seven waivers including subscription handling fees, safe custody fees, interest collection fees, redemption at maturity fees, transfer-in fees from other banks, transfer-in fees from brokerage firms and transfer fees between central money markets units and central clearing and settlement system.

Bright Smart Securities (1428) said there were nearly 1,800 investors placing orders with an average of 5 to 10 lots per person. The broker is offering 13 waivers to all customers and expects more than 500,000 applications for the bonds in the city.

It recommends investors to subscribe to 15 to 20 lots.

Its competitor Chief Securities is offering 11 incentives and it is also offering a limited number of 7-Eleven convenience store cash coupon worth HK$30 for customers who use its cash subscription service during the promotion period.

Although the airport and silver bonds issued earlier offer higher rates at 4.25 and 4 percent respectively, market watchers says the new bond is attractive with the US cutting interest rate cuts.

Investors flock to retail infrastructure bonds