HKMA to Tender RMB 0.75B in 2-Year Bonds on Aug. 13

The Hong Kong Monetary Authority (HKMA) has announced a tender for RMB 0.75 billion in 2-year institutional government bonds under its Infrastructure Bond Programme. The tender, scheduled for August 13, 2026, will re-open the existing 3-year bond issue (03GB2807001), maturing on July 28, 2028, with a 1.59% annual coupon rate. Settlement will take place on August 17, 2026.

The bonds, offered at an indicative price of 100.27 as of August 7, will yield 1.452% on a semi-annualized basis. This marks another re-opening initiative by the HKMA, leveraging its strategy of expanding existing bond lines instead of creating new ones, a move aimed at increasing liquidity and attracting institutional participation.

Details of the Tender

The tender is open exclusively to Primary Dealers under the Infrastructure Bond Programme. Interested institutional investors must submit applications through these dealers, with minimum bids starting at RMB 50,000 or multiples thereof. The accrued interest for successful bidders will be RMB 43.56 per RMB 50,000 denomination on the settlement date.

Tender results will be published on multiple platforms, including the HKMA website, Bloomberg, and Refinitiv, by 3:00 pm on the auction day. Secondary trading is expected to commence immediately on the Stock Exchange of Hong Kong under the bond’s stock code, 85039 (HKGB1.59 2807-R).

Market and Strategic Context

The HKMA’s Infrastructure Bond Programme has been a cornerstone in Hong Kong’s strategy to enhance its role as a global offshore renminbi hub. By funding infrastructure projects through these bonds, the HKMA not only supports government investment but also deepens liquidity in Hong Kong’s RMB bond market. Institutional bonds like these provide a stable, fixed-income option for investors seeking exposure to RMB-denominated assets.

Recent re-openings of similar issues have shown steady demand. For instance, a 2-year RMB HKSAR bond tender held on February 5, 2026, raised RMB 0.75 billion at a competitive yield. These consistent auctions underpin Hong Kong’s strategy of maintaining a robust pipeline of RMB-denominated instruments to meet institutional demand.

Why It Matters

With a 1.59% annual coupon and semi-annual yield of 1.452%, this bond issuance offers a compelling option for institutional investors seeking low-risk exposure to Chinese currency assets amid global economic uncertainties. The bond’s re-opening also enhances liquidity for existing holders, making it an attractive addition to diversified fixed-income portfolios.

The HKMA’s consistent activity in the RMB bond market underscores its commitment to strengthening Hong Kong’s position as a leading offshore RMB center while supporting local infrastructure development. Investors should keep an eye on the tender results next week to gauge demand and market sentiment for RMB fixed-income products.

Image source: Shutterstock