Editorial | Silver Bonds a source of stability for Hong Kong’s elderly investors
The returns offered by Silver Bonds are important for the city’s retirees, with many Hongkongers saying they expect to work well into their 60s
Applications for the three-year Silver Bonds, exclusively available to those aged 60 and above, were twice the government’s latest issuance of HK$50 billion (US$6.4 billion). The government said there were 371,821 valid bids for HK$98.23 billion worth of bonds before the offer period closed on September 29.
The total bid amount was up 40 per cent from HK$69.98 billion last year. Applications rose 24 per cent compared with last year’s 300,413. The previous record was 323,783 bids for HK$71.7 billion worth of bonds in 2023.
In light of the strong demand, the government has announced it is raising the final issue size to the upper limit of HK$55 billion when bonds are issued on October 10.
The government reduced the guaranteed coupon rate for its 10th batch of bonds to 3.85 per cent, which was down from 4 per cent last year. The move followed a 25-basis-point cut by the US Federal Reserve on September 18. The government will pay either the minimum fixed rate or a floating return linked to inflation, whichever is higher.
The bonds still offer a coupon that should help buyers keep up with inflation as well.