HKMA Reopens 5-Year RMB Bonds, Allots RMB1.25B at 1.529%

The Hong Kong Monetary Authority (HKMA) successfully concluded a re-opening of its 5-year RMB institutional government bonds on August 13, issuing RMB1.25 billion under the Infrastructure Bond Programme. The bonds were met with strong demand, attracting RMB4.955 billion in applications, resulting in a bid-to-cover ratio of 3.96. The average accepted price was 100.71, translating to an annualised yield of 1.529%.

This latest issuance, designated stock code 85122 (HKGB1.68 3105-R), carries a coupon rate of 1.68% and matures on May 19, 2031. Settlement is scheduled for August 17, 2026. The lowest accepted price was 100.59, giving a yield of 1.557%, while the average tender price came in at 100.25, implying a higher average yield of 1.632%.

The re-opening reflects Hong Kong’s ongoing commitment to developing its local bond market and solidifying its role as a major offshore renminbi (RMB) hub. With RMB-denominated bonds, the HKSAR Government aims to support RMB yield curve formation and market infrastructure, while also funding strategic infrastructure projects key to Hong Kong’s long-term growth.

This auction follows similar issuances in recent months, including a 7-year RMB bond tendered on June 25, which achieved a bid-to-cover ratio of 8.47 and an average yield of 1.742%. By comparison, the current 5-year bond yield of 1.529% underscores demand for shorter-tenor debt, possibly tied to investor views on interest rate trends and the state of the broader macroeconomic environment.

The HKSAR Government Bond Programme, under which these bonds are issued, has been instrumental in promoting bond market liquidity and depth in Hong Kong. The RMB-denominated segment plays a strategic role in enhancing Hong Kong’s positioning in offshore RMB business, particularly as international interest in RMB assets grows amid China’s gradual financial opening.

For investors, the 5-year bond’s yield of 1.529% sits competitively within the current RMB fixed-income landscape, offering a moderate risk-return profile backed by the HKSAR Government. The high bid-to-cover ratio of 3.96 highlights robust appetite for government-guaranteed RMB instruments, despite continued global economic uncertainties.

With settlement set for August 17, the latest issuance further strengthens Hong Kong’s capital market infrastructure and reinforces its dual role as a financial hub and a conduit for RMB internationalization. Market participants will be closely watching future tenders to gauge yield trends and investor sentiment in the evolving fixed-income market.

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