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Latest round of Hong Kong’s Silver Bonds attracts record US$8.77 billion from senior savers
- Due to the overwhelming response, the final issuance amount of this batch of Silver Bonds will increase to HK$30 billion
- HSBC, the city’s biggest bank, said number of subscriptions received almost doubled from 2020 while total value surged 71 per cent
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The latest round of Hong Kong’s inflation-linked government debt targeted at senior savers, known as Silver Bonds, has been oversubscribed 2.8 times, attracting a record HK$67.97 billion (US$8.77 billion) from 257,000 people, according to a Hong Kong government spokesperson on Friday.
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Due to the overwhelming response, the final issuance amount of this batch of Silver Bonds will increase from HK$24 billion to HK$30 billion, according to a government spokesperson, double the amount issued in the previous offering in December. The final allotment result will be announced on August 6.
In its latest offering from July 20 until 2pm on Friday, the city’s government lowered the minimum age to subscribe from 65 to 60 for the first time since the bonds were first issued to retail investors in 2016. This adds 600,000 more people who are qualified to buy the bond, expanding the total to 2 million.
The response was the strongest yet among all six rounds of Silver Bond offerings issued by the city, blowing past the HK$8.9 billion in principal attracted from applicants in 2016 and HK$7.9 billion in 2019. It also eclipsed the HK$43.2 billion spent by about 135,000 investors in December last year.
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The Silver Bonds are popular because they offer a guaranteed minimum annual return of 3.5 per cent and possibly higher returns, if consumer prices rise. These returns are particularly attractive at the moment because they offer a higher minimum payout than many traditional savings products as central banks keep interest rates at historic lows.
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