Key features
- A 3-year bond whose semi-annual interest payments are linked to average annual inflation, subject to a minimum interest rate^.
- Principal will be repaid in full (i.e. 100%) at maturity.
Interest determination mechanism
- Interest payments will be made on the scheduled interest payment dates at the end of every 6 months in arrear, based on the per annum interest rate determined and announced on its relevant interest determination date.
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The relevant per annum interest rate determined and announced on each interest determination date is the higher of:-
- the floating rate, being the arithmetic average of the year-on-year rates of change in the Composite Consumer Price Index compiled and published by the Census and Statistics Department of HKSAR Government based on the results of the most recent Household Expenditure Survey at the relevant interest determination date for the 6 most recent preceding months, rounded to the nearest two decimal places; and
- the fixed rate^.
- The amount of interest received on an interest payment date would be the applicable per annum interest rate * the principal amount of bonds you hold (i.e. face value of 100%) * actual number of days in that interest accrued period on the basis of a 365-day year.
- A more detailed description can be found in the relevant issue circular.
Transfer restriction and early redemption
- There is no secondary market for the bonds. You cannot transfer your bonds to any other person save for the transfer to your successor under the relevant succession law.
- If you wish to sell your retail bonds before maturity, you may submit an early redemption request to your placing bank/designated securities broker on any business day. Your bonds will be redeemed on the third business day following receipt by your placing bank/designated securities broker of your early redemption request in relation to your bonds (the Early Redemption Settlement Date) at an amount equal to their principal amount together with accrued but unpaid interest for the period from (and including) the interest payment date immediately preceding the Early Redemption Settlement Date (or if none, the issue date) up to (but excluding) the Early Redemption Settlement Date and at a fixed rate^ per annum (calculated on the actual number of days in the relevant period, on the basis of a 365-day year and is rounded to the nearest cent).
- A more detailed description can be found in the relevant issue circular.
^ The fixed rate is 2.00% per annum for Silver Bond Series due 2019 and Silver Bond Series due 2020; 3.00% per annum for Silver Bond Series due 2021 and Silver Bond Series due 2022； 3.50% per annum for Silver Bond Series due 2023 and Silver Bond Series due 2024; 4.00% for Silver Bond Series due 2025; and 5.00% for Silver Bond Series due 2026.