More public institutions in Hong Kong are gearing up to tap into the bond market and other financing options to meet the growing financial needs of various sectors and a strong appetite for bonds among local and international investors.
Writing in his weekly blog on Sunday, Financial Secretary Paul Chan Mo-po stressed the importance of financial backing in driving key industries forward, including infrastructure, as well as innovation and technology.
READ MORE: HKIC plans overseas visits, eyeing Middle East or Southeast Asia as first stop
The Hong Kong Special Administrative Region government will invite subscriptions for a new batch of silver bonds totaling HK$50 billion ($6.4 billion) on Sept 30, with interest rates linked to inflation and guaranteed to be no less than 4 percent. The issuance falls under the retail part of the Infrastructure Bond Program, meaning the proceeds will be funneled into the Capital Works Reserve Fund for investment in infrastructure projects.
Silver bonds targeting residents aged 60 and above offer a “win-win” opportunity for them, Chan said. “Seniors will not only gain a reliable income but also play their role in contributing to the development of their communities and Hong Kong.”
READ MORE: HK to open trade office in Malaysia amid US decoupling risks
Besides silver bonds, the government plans to issue HK$20 billion in green and infrastructure bonds later this year, with details expected in the coming months. This is aimed at broadening the accessibility of financial services and products among residents, and enhancing public engagement in infrastructure and sustainable development projects, he said.
With government support, more public institutions are expected to seek financing through bond issuance and other methods, the finance chief said. He noted that the bonds issued by the government and public entities have long been well-received by both local and global investors, such as banks, asset management companies, insurance firms, and family offices, often seeing multiple oversubscriptions.
Earlier this year, Airport Authority Hong Kong, which operates Hong Kong International Airport, made a retail bond offering that was subscribed by over 175,000 investors and raised around HK$15.7 billion - more than triple the original target of HK$5 billion. The proceeds will be used for the construction of the airport’s three-runway system.
In August, the Urban Renewal Authority issued three bonds totaling HK$12 billion. The proceeds will be for urban renewal projects and general operational purposes.
READ MORE: Hong Kong inaugurates AI lab in innovation, technology drive
The Hong Kong Housing Society announced on Thursday it has secured a HK$12-billion syndicated loan from 12 local and international banks, in a bid to bolster its business development efforts, particularly in supporting the construction of subsidized housing projects. The Housing Society is planning more than 20 projects that are expected to deliver more than 17,000 subsidized housing units in the next five years.
Chan said leveraging market capital also serves as a way to evaluate the financial feasibility and viability of these projects from a market perspective.
The advancement of technology also requires financial backing to help tech companies weather the storms they encounter during their early stages and expansion, he said, adding that improving the city’s financial services can enable more private equity funds, venture capital firms, and long-term investors to better support tech startups.
Contact the writer at irisli@chinadailyhk.com
