Hong Kong Monetary Authority Announces Tender of 1-Year HONIA-Indexed Floating Rate Notes

The Hong Kong Monetary Authority (HKMA), representing the Hong Kong Special Administrative Region Government (HKSAR Government), has announced a tender for 1-year HONIA-indexed Floating Rate Notes (Notes) under the Institutional Bond Issuance Programme. The tender is scheduled for Wednesday, August 14, 2024, with settlement on Thursday, August 15, 2024, according to the Hong Kong Monetary Authority.

Details of the Tender

A total of HK$1.5 billion worth of 1-year Notes will be tendered. These Notes will mature on August 15, 2025, and will carry interest indexed to the Hong Kong Dollar Overnight Index Average (HONIA), payable quarterly in arrears. The tender is exclusively open to Recognized Dealers appointed as Primary Dealers. Anyone interested in applying for the Notes can do so through any of the Primary Dealers listed on the Hong Kong Government Bonds website.

Each tender application must be for a minimum amount of HK$50,000 or integral multiples thereof. Tender results will be published on the HKMA’s website, the Hong Kong Government Bonds website, the Refinitiv screen (HKGBINDEX), and Bloomberg (GBHK <GO>) by 3:00 pm on the tender day.

Key Information

Issue Number
01GH2508


Stock Code
4282 (HKGB FRN 2508)


Tender Date and Time
Wednesday, August 14, 2024, 9:30 am to 10:30 am


Settlement Date
Thursday, August 15, 2024


Amount on Offer
HK$1.5 billion


Issue Price
At par


Maturity
1 year


Maturity Date
August 15, 2025


Interest Rate
Indexed to the sum of the annualized compounded average of daily HONIA in each interest period and the highest accepted spread at tender, subject to a minimum of 0% per interest period. Details on the calculation of the interest rate are available on the Hong Kong Government Bonds website.


Interest Period End Dates
November 15, 2024; February 17, 2025; May 15, 2025; August 15, 2025


Interest Payment Dates
November 19, 2024; February 19, 2025; May 19, 2025; August 19, 2025


Method of Tender
Competitive tender


Tender Amount
Each competitive tender must be for an amount of HK$50,000 or integral multiples thereof. Applications must be submitted through a Primary Dealer.


Other Details
Please refer to the Information Memorandum on the Hong Kong Government Bonds website or approach Primary Dealers.


Expected Listing Date
August 16, 2024

Background and Significance

The issuance of these Notes is part of the HKMA’s broader strategy to enhance the depth and liquidity of the local bond market. By indexing the interest rate to HONIA, the HKMA aims to provide a more stable and transparent benchmark, reflecting the actual cost of borrowing in the overnight interbank market. This move is expected to attract more institutional investors and foster greater confidence in the Hong Kong bond market.

For more information, please visit the official Hong Kong Monetary Authority website.

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