The government will pay either the minimum fixed rate or a floating return linked to Hong Kong’s inflation, whichever is higher. Depending on market demand, the bond sale could be expanded to HK$55 billion, making it one of the largest tranches since the programme began in 2016.
Silver Bonds, sold to people aged 60 and above, were designed to support Hong Kong’s ageing population by offering them a stable source of inflation-adjusted income to cope with rising living costs and uncertain financial market returns. They are more appealing than 12-month bank deposits because they pay higher interest, said Christopher Hui, the Secretary for Financial Services and the Treasury Bureau, during a press conference on Friday.
“Silver Bonds present a dependable and stable investment opportunity, designed to deliver peace of mind and consistent returns for seniors,” said Cheuk Wong, the head of markets and securities services in Hong Kong for HSBC, one of the two arrangers of the sale. “With the US interest rate cut trajectory now established, these bonds have become an appealing option for those seeking long-term stability.”
The government takes several fundamental economic factors into account when pricing bond rates, he added. This includes the expected slowdown in global growth and the US unemployment rate, both of which affect Hong Kong’s economy.
