Hong Kong’s latest offering of HK$20 billion (US$2.7 billion) infrastructure bonds got off to a strong start, as HSBC and other co-arrangers reported keen demand when the government started taking orders from retail investors on Tuesday.
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The three-year bonds, which will remain open for public subscription until 2pm local time on December 6, are appealing as they offer a minimum annual yield of 3.5 per cent, analysts said. The government may increase the offering size to HK$25 billion to meet any excess demand.
“HSBC saw a positive response from the sales of the retail infrastructure bond evidenced by an increase in average subscription size by HSBC customers, compared to the first day sales of green bonds in 2023,” the bank said in a statement. Most applications were submitted via mobile or online banking, it said, adding that the lender is offering some fee waivers to participate in the offering.
China Citic Bank International described the reception as “very strong”, with each investor subscribing to HK$150,000 worth of bonds on average, according to a statement. That is 25 per cent higher than the average bid during the green bond sale last year, it added.
This is Hong Kong’s second retail bond offering in as many months. The government raised HK$50 billion from Silver Bond in mid-October, which was made under its inaugural infrastructure bond framework. Demand was 1.4 times the amount on offer, but the number of applicants and total bids declined from the previous sale in 2023.
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