A HK$2 billion mortgage-backed bond issue - the largest sale of its type in the SAR - has been heavily oversubscribed.
The Hong Kong Mortgage Corp (HKMC) issue has received a good response from SAR institutional investors, including insurance companies, pension-fund managers and private and commercial banks, according to Merrill Lynch International, lead manager of the deal.
Richard Stoddard, Merrill Lynch (Asia Pacific) managing director, said applications of almost HK$3 billion had been received, well above the issue size. Subscription opened last week.
The low interest rate and the guarantee of principal and interest payment by the HKMC had attracted investors' buying interest, he said.
Tony Latter, executive director of HKMC and deputy chief executive of the Hong Kong Monetary Authority, said the issue would help the development of mortgage-backed securities in the SAR.
'This provides opportunities for banks wishing to better manage or offload their mortgage portfolios. It creates a new avenue for investment for fund managers and other investors.'