The Financial Secretary proposed in the 2023-24 Budget the setting up of the Infrastructure Bond Programme (“IB Programme”) to enable better management of the cashflow needs of major infrastructure projects and facilitate their early completion for the good of the economy and people’s livelihood.
This webpage only provides a quick summary of the retail bonds (“retail bonds”) to be issued under the IB Programme. You should read the programme circular together with all updates and supplements which HKSAR Government has published. HKSAR Government will also publish an issue circular to specify the terms for each series of retail bonds under the IB Programme. Before deciding whether to apply for any retail bonds under the IB Programme, you should read the relevant issue circular as well as the programme circular (as amended or supplemented from time to time) and ensure you fully understand the risks associated with investing in the retail bonds.
The HKSAR Government announced on 10 September 2024 the launch of a new batch of Silver Bond to be issued under the Infrastructure Bond Programme. The relevant programme circular and issue circular of the latest batch of Silver Bond will be uploaded to this website at the start of the subscription period on 30 September 2024.
KEY BENEFITS OF INVESTING IN RETAIL BONDS |
KEY RISKS OF INVESTING IN RETAIL BONDS |
- Strong credit: HKSAR Government has a strong “investment grade” credit rating.
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- Interest rate risk: The market value of retail bonds with a fixed rate of interest, or with a rate of interest that includes a fixed rate component, may decrease if the prevailing Hong Kong dollar interest rates increase during the term of those retail bonds.
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- Regular returns: Retail bonds offer regular payments of interest for the entire term of your investment.
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- Index risk: The market value of retail bonds with an interest rate linked to an index may be affected by movements in that index.
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- Interest rate: Retail bonds may offer higher interest rates than Hong Kong dollar time deposits of similar maturities.
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- Exchange rate risk: The Hong Kong dollar value of retail bonds denominated in a currency other than Hong Kong dollars will decrease if that currency depreciates against the Hong Kong dollar.
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- Range of maturities: Retail bonds may be available in a number of different maturities.
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- Liquidity risk: There may not be an active secondary market or any secondary market at all for your retail bonds and it may not be possible to sell your retail bonds prior to maturity or the sale price may be lower than the amount you invested.
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- Credit risk: The retail bonds are not secured. When you buy retail bonds, you will be relying on the creditworthiness of HKSAR Government. Adverse changes in the wider economic conditions in Hong Kong and the world and/or the creditworthiness of HKSAR Government may reduce the market value of your retail bonds and may affect HKSAR Government’s ability to make payments of principal of and interest on your retail bonds. In the worst case scenario, you could lose all of your investment.
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- Intermediary risk: You can only hold retail bonds indirectly through certain institutions whom you will have to rely on to perform a number of functions, including passing on payments of principal of and interest on your retail bonds to you and proving your interest in your retail bonds.
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- Infrastructure investment risk: The retail bonds may not necessarily be a suitable investment if you seek exposure to specific types of infrastructure projects. While the proceeds of the retail bonds will be used to fund one or more of the “Eligible Projects” as defined in the Infrastructure Bond Framework, payments under the retail bonds are not linked to the performance of the relevant Eligible Project(s). The retail bonds are not secured by income from the Eligible Project(s) and you do not have any rights to the Eligible Project(s). HKSAR Government has the sole and absolute discretion to determine the allocation of the proceeds of retail bonds to the Eligible Project(s), which may be changed and/or updated from time to time.
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