Hong Kong to issue inflation-linked bonds

Bloomberg | Updated on October 05, 2020

The funds to be used to to encourage residents to take part in the city’s financial development

Hong Kong plans to issue as much as HK$13 billion ($1.7 billion) of inflation-linked bonds and silver bonds to encourage residents to take part in the city’s financial development, according to Financial Secretary Paul Chan.

The government issued about HK$60 billion of inflation-linked so-called iBonds from 2011 — when they were first introduced — to 2016 and attracted a total of more than 500,000 subscribers, Chan said in a blog post on Sunday.

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Emerging market companies and governments have sold a record of about $530 billion in dollar and euro-denominated bonds this year, data compiled by Bloomberg showed. The debtors have taken advantage of global liquidity as central banks try to offset the impact of the pandemic. The iBonds will carry a minimum interest rate of 2 per cent, higher than previous similar bonds. Payments are paid every six months, and the interest rate is linked to the average annual inflation rate of the Hong Kong Composite Consumer Price Index. The government will also issue silver bonds aimed at seniors aged 65 and above. The Hong Kong Monetary Authority will hold a press conference at 4 p.m. Monday on the launch of iBonds.

Published on October 05, 2020

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