Retail infrastructure bond launched

The Government today announced the launch of a retail infrastructure bond for subscription by Hong Kong residents.

The target issuance size of the bond is $20 billion, with each lot offered at $10,000 and a tenor of three years. Interest will be paid semi-annually at a rate linked to inflation in Hong Kong, subject to a minimum of 3.5%.

Subject to the subscription response, the Government may exercise discretion to increase the issuance size to a maximum of $25 billion.

This issuance is the retail part of the Infrastructure Bond Programme.

Proceeds will be credited to the Capital Works Reserve Fund for investment in infrastructure projects in accordance with the programme framework, the Financial Services & the Treasury Bureau said.

The Government will publish information on the allocation of the proceeds on an annual basis, it added.

Financial Secretary Paul Chan said the Government's issuance of the retail infrastructure bond will provide to citizens a safe and reliable investment option with steady returns, as well as a sense of participation and a sense of gain in support of infrastructure projects for Hong Kong's long-term development.

"It will, on the other hand, finance infrastructure projects to facilitate their early completion for the good of the economy and people's livelihood. This issuance will also further promote the development of the retail bond market and financial inclusiveness."

The subscription period will start from 9am on November 26 and end at 2pm on December 6, during which Hong Kong residents may apply through a placing bank, securities broker or the Hong Kong Securities Clearing Company.

The retail infrastructure bond will be issued on December 17 and listed on the Hong Kong Stock Exchange the next day. It can be traded in the secondary market.

A maximum allocation of $1 million per investor will be stipulated, meaning that each investor will be allocated 100 lots of the bond at most.