Hong Kong Raises Silver Bonds Coupon Rate Amid Fed Interest Rate Expectations

Hong Kong is increasing the coupon rate for its latest Silver Bonds issue to attract more investors. The guaranteed annual coupon rate will be 4.25%, up from 3.85% last year. This move comes as market expectations suggest the US Federal Reserve will raise interest rates later this year, impacting Hong Kong's economy.

The government announced that it will sell up to HK$50 billion (US$6.4 billion) of Silver Bonds with a three-year term and an annual coupon rate of 4.25%. The bonds will be on sale from August 21 to September 4, with the issue date set for September 15.

Compared to current bank fixed-deposit products offering around 2-3% for a 12-month term, this year's Silver Bond rate is attractive, according to Secretary for Financial Services and the Treasury Christopher Hui Ching-yu.