Hong Kong Monetary Authority Reports Tender Results for 1-Year HONIA-Indexed Floating Rate Notes

Tender Results Overview

The tender, part of the Institutional Bond Issuance Programme, saw a total allocation of HK$1.5 billion in 1-year HONIA-indexed Floating Rate Notes (issue number 01GH2508). The HKMA reported receiving HK$6.840 billion in tender applications, resulting in a bid-to-cover ratio of 4.56. The highest spread accepted was 0.22%.

Details of the Issuance

Tender Date
:
14 August 2024
Issue Number
:
01GH2508
Stock Code
:
4282 (HKGB FRN 2508)
Issue and Settlement Date
:
15 August 2024
Tenor
:
1-year
Maturity Date
:
15 August 2025
Amount Applied
:
HK$6.840 billion
Amount Allotted
:
HK$1.5 billion
Bid-to-Cover Ratio*
:
4.56
Highest Spread Accepted
:
0.22%
Average Spread Accepted
:
0.17%
Pro-rata Ratio
:
About 8%
Average Tender Spread
:
0.32%

* Calculated as the amount of notes applied for over the amount of notes issued.

Market Implications

The successful tender of the 1-year HONIA-indexed Floating Rate Notes indicates strong demand for Hong Kong government bonds. With a bid-to-cover ratio of 4.56, the market’s appetite for secure, government-backed financial instruments remains robust.

This issuance aligns with the HKMA’s ongoing efforts to maintain a stable financial environment and provide diverse investment opportunities. The accepted average spread of 0.17% highlights investor confidence in the stability and creditworthiness of the HKSAR Government.

The HKMA continues to play a crucial role in managing Hong Kong’s monetary policy and financial stability, and the results of this tender further underscore the institution’s effectiveness in these areas.