Hong Kong Monetary Authority to Reopen 2-Year RMB Government Bonds

The Hong Kong Monetary Authority (HKMA) has announced the reopening of 2-year Renminbi (RMB) government bonds, scheduled for tender on February 13, 2025. This move is part of the Infrastructure Bond Programme managed by the Hong Kong Special Administrative Region Government. The reopening targets the 2-year Government Bond issue 02GB2611001, with settlement anticipated on February 17, 2025, according to the Hong Kong Monetary Authority.

Tender Details

The HKMA is offering an additional RMB1.5 billion of the outstanding bonds, which will mature on November 18, 2026. The bonds carry an interest rate of 2.04% per annum, payable semi-annually. The indicative pricing for these bonds, as of February 7, 2025, is 99.89, reflecting a semi-annualized yield of 2.103%.

Participation in the tender is restricted to Primary Dealers under the Infrastructure Bond Programme. Interested parties can apply through these dealers, with each tender requiring a minimum amount of RMB50,000 or its multiples. The results of the tender will be published across various platforms, including the HKMA’s website, the Hong Kong Government Bonds website, Bloomberg, and Refinitiv, by 3:00 pm on the tender day.

Bond Specifications

The bonds, identified by stock code 84585 (HKGB2.04 2611-R), will see their first interest payment on May 18, 2025. Payments will continue semi-annually until the maturity date. The accrued interest payable by successful bidders on the issue date will be RMB254.30 per RMB50,000 denomination.

The bonds are part of the institutional segment of the Infrastructure Bond Programme, with proceeds directed towards infrastructure projects as outlined in the Infrastructure Bond Framework. The bonds are fungible with existing issues listed on the Stock Exchange of Hong Kong.

Context and Implications

This tender is part of a broader strategy by the HKMA to bolster infrastructure financing through structured bond offerings. The reopening not only provides investors with stable returns in a low-interest environment but also supports critical infrastructure initiatives in Hong Kong. As global economic conditions remain volatile, such instruments offer both security and growth potential for institutional investors.

Market observers will be keenly watching the response to this bond offering, as it may set a precedent for future issuances under the Infrastructure Bond Programme. The success of this tender could lead to increased investor confidence and further participation in Hong Kong’s government bond market.

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