Guaranteed rate of silver bonds raised to 4.25pc

Hong Kong has increased the guaranteed minimum interest rate for its latest silver bond issuance to 4.25 percent, up from 3.85 percent in the previous offering. This 11th batch of the three-year bond programme, available to those born in or before 1967, aims to raise up to HK$55 billion, contingent on investor response. Each unit is priced at HK$10,000, with a cap of 100 units or HK$1 million per subscriber. Interest payments are made semi-annually, tied to Hong Kong's inflation rate.

Secretary for Financial Services and the Treasury Christopher Hui explained that the higher rate was determined after considering various factors, comparing it to other products like 12-month time deposits, which offer 2 to 3 percent. He emphasized the bond's appeal due to its three-year tenure, stating it should attract the targeted demographic.

The Hong Kong Monetary Authority's record of public interest in silver bonds has been strong. Banks involved in distribution, such as HSBC, also express confidence, noting the product's success and the impact of the 4.25 percent rate, which already factors in potential future interest rate increases.

Financial Secretary Paul Chan highlighted the issuance's significance as a strategic move, offering a safe, steady, and low-risk investment option for senior citizens while stimulating the financial sector's engagement in Hong Kong's growing silver economy. Eligible individuals can apply from August 21 to September 4 through designated banks and securities brokers, with bond issuance scheduled for September 15.

The funds raised will be utilized for financing or refinancing infrastructure projects under the Capital Works Reserve Fund.