Hong Kong's Silver Bonds Draw Record Bids Amid Higher Interest Rates
Hong Kong's Silver Bonds drew record-breaking interest from investors, with a total of 478,000 bids submitted for HK$119.8 billion (US$15.28 billion) worth of bonds in the latest round of the government's program.
The number of applicants surged by 28% compared to last year's offering, which itself was a record high at the time with 371,821 applications for HK$98.23 billion of Silver Bonds.
In response to the strong demand, the Hong Kong Monetary Authority is expected to raise the final issuance to the upper limit of HK$55 billion from the original HK$50 billion.
The government increased the guaranteed coupon rate for its 11th batch of Silver Bonds to 4.25%, up from 3.85% last year and from 4% in 2024, ahead of the US Federal Reserve's next rate decision at the coming Federal Open Market Committee (FOMC) on September 17.
About 60% of traders expected the Fed to implement a 0.25 percentage point rate increase as of Thursday, while 40% expected no rate change, according to data from CME FedWatch based on Fed funds futures contracts.