Zach Anderson
Nov 15, 2024 00:03
The HKMA announced the results of a 2-year RMB Government Bond tender, revealing a bid-to-cover ratio of 5.41 and an annualized yield of 2.062%.
The Hong Kong Monetary Authority (HKMA), acting on behalf of the Hong Kong Special Administrative Region Government (HKSAR Government), has announced the results of the recent tender for 2-year RMB institutional Government Bonds. The tender, part of the Infrastructure Bond Programme, was conducted on November 14, 2024, offering a total of RMB1.0 billion in bonds, according to the Hong Kong Monetary Authority.
High Demand for Government Bonds
The tender attracted significant interest, with RMB5.409 billion in applications received, resulting in a robust bid-to-cover ratio of 5.41. This ratio indicates the strong demand for these bonds, as the amount applied for was over five times the amount issued. The bonds were issued under the stock code 84585 (HKGB2.04 2611-R) and are set to mature on November 18, 2026.
Yield and Pricing Details
The average price accepted for the bonds was 99.98, which corresponds to an annualized yield of 2.062%. The lowest price accepted was 99.82, yielding 2.144%. The pro-rata allocation ratio stood at approximately 62%, highlighting the competitive nature of the tender process. The average tender price was recorded at 99.64, equating to a yield of 2.240%.
Bond Characteristics
The bonds carry a coupon rate of 2.04% and are set to be issued and settled on November 18, 2024. These bonds are part of the HKSAR Government’s ongoing efforts to develop the RMB bond market and provide institutional investors with more investment options.
The HKMA’s successful bond issuance underscores the continued confidence in Hong Kong’s financial stability and the appeal of RMB-denominated assets amidst global economic uncertainties.
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