Retail investors starved of positive yields offered on savings and time deposits were big winners in this week's HK$500 million note issue from the Hong Kong Mortgage Corp (HKMC). Priced finally in the tender process at an effective annualised yield of 4.42 per cent, the notes offered significantly higher returns than the 1.5 per cent to 1.75 per cent offered on savings and time deposits. In the wake of the tender process, which saw recognised dealers oversubscribing the HK$250 million institutional tranche 17 times, the HK$50,000 face value notes were priced at 99.73 per cent, the Hong Kong Monetary Authority said. That means retail investors will receive a refund of HK$135 on each HK$50,000 note. The notes were offered at a coupon rate of interest of 4.28 per cent payable semi-annually, but after the discount is taken into account they will earn investors an effective yield of 4.42 per cent. In response to the enthusiastic demand by retail investors, the HKMC decided to increase the size of the portion for allocation to retail investors from HK$100 million to HK$250 million. The remaining HK$250 million of the three-year note issue was oversubscribed 17 times by recognised dealers, said the HKMA. It added that the decision to increase the share of the note issue available to retail investors was in keeping with the aim of the HKMC to diversify the investor base of its debt securities and to promote the development of the retail debt market. More than 890 investors submitted applications using the Electronic Initial Public Offering process, involving a total application amount of about HK$300 million.