Hong Kong to issue 7th batch of Silver Bond

105
2
Hong Kong to issue 7th batch of Silver Bond

An elderly man wearing a face mask does exercise in Ma On Shan in Hong Kong, March 7, 2022. The Hong Kong Special Administrative Region's government announced the issuance of a seventh batch of Silver Bond worth between HK $35 billion $4.46 billion and HK $45 billion. The bonds will offer investors a guaranteed return rate of 4 percent with a three-year tenor.

The issuance size of the seventh Silver Bond is HK $35 billion, though the government may exercise its discretion to increase the issuance size to a maximum of HK $45 billion. The government statement on Tuesday said that Hong Kong residents who turn 60 in or before 2023 and hold a valid Hong Kong identity card will be eligible for subscription.

The Silver Bond issue will be offered at HK $10,000 per unit with a tenor of three years. Bondholders will be paid interest once every six months, at a rate linked to the inflation rate in Hong Kong, which is higher than the minimum rate of 3.5 percent of the sixth batch issued in August last year.

Silver Bond offers senior citizens a safe and reliable investment option with steady returns in an uncertain investment environment. Financial Secretary Paul Chan Mo-poChan Mo-po said in the statement that both the target issuance size and the maximum issuance size and the minimum interest rate of this issuance are higher than those of our previous issuances, which would promote greater participation by senior citizens.

Bond investors can sell their bonds before maturity to the government at par, along with accrued but unpaid interest, so there won't be a secondary market for Silver Bond. A maximum allocation amount of HK $1 million per investor will be imposed, meaning that each investor will be allocated 100 units of retail bonds at most.

The subscription period starts on Aug 23 and ends on Sept 2. In the news conference, Hong Kong Monetary Authority Executive Director Monetary Management Clara Chan said eligible residents should hold the bond investment until maturity.

Rush seen for latest silver bonds ALSO READ:

The bond issuance arrangement was referenced to the past bond issuance experience, current financial market situation and the recovery pace of the financial market. The issuance of these bonds will boost market confidence and the development of the local bond market, Chan said.

The finance chief announced in February the 2022 -- 23 Budget that the SAR administration will issue Silver Bond this year, with a view to give seniors an investment option with steady returns. According to Census and Statistics Department data, there will be 2.1 million senior citizens eligible for subscribing to the Silver Bond.