The Hong Kong Mortgage Corporation Limited (HKMC) is pleased to
announce today (Monday) the launch of a new retail bond issue with
four series of notes (the "Issue") under the HK$20 Billion Retail
Bond Issuance Programme (the "Programme").
The coupons of the four series of notes are as follows:
The HKMC today signed an agreement with the two Underwriting
Banks, namely, The Hongkong and Shanghai Banking Corporation
Limited and Bank of China (Hong Kong) Limited for an underwriting
amount of HK$300 million in respect of the 3-year Hong Kong dollar
note of the Issue.
Under the Programme, the HKMC has appointed 17 banks from the
Dealer Group of the Programme as Placing Banks to distribute the
Issue to retail investors. The 17 Placing Banks are Bank of America
(Asia), Bank of China (Hong Kong) Limited, CITIC Ka Wah Bank, Bank
of Communications, Bank of East Asia, Chiyu Bank, Dah Sing Bank,
DBS Bank, Hang Seng Bank, The Hongkong and Shanghai Banking
Corporation Limited, Fubon Bank (Hong Kong), Liu Chong Hing Bank,
Nanyang Commercial Bank, Shanghai Commercial Bank, Standard
Chartered Bank (Hong Kong) Limited, Wing Hang Bank and Wing Lung
Bank.
The Placing Banks will also perform the role of market makers
for the Issue to facilitate transactions in the secondary market.
This offering mechanism through Placing Banks was first introduced
by the HKMC in 2001 and has proven highly effective in marketing
bonds to retail investors. So far, the HKMC has issued seven retail
bond issues totaling HK$10.4 billion.
HKMC retail bonds provide investors with an additional
investment product to achieve a balanced investment portfolio and
stable interest income. The Issue, with the terms and conditions
highlighted in Annex A, will bring the following additional
benefits to retail investors:
(a) Wide distribution network to
reach out effectively to retail investors: the 17 Placing
Banks have over 850 designated bank branches for handling
subscriptions. In addition, retail investors can subscribe for the
notes by telephone or Internet banking facilities provided by
certain Placing Banks.
(b) Variety in currency, tenor and
return to provide investment choices to retail investors:
the Issue comprises four series of notes, allowing retail investors
a choice of currency and tenor for portfolio diversification. The
HKMC will launch two series of Hong Kong dollar fixed rate notes of
1-year maturity and 3-year maturity as well as two series of US
dollar fixed rate notes of 1-year maturity and 1-year extendable up
to 3-year maturity. It is the first-ever US dollar notes launched
by the HKMC.
(c) Established market making
arrangement to facilitate transactions in the secondary
market: the 17 Placing Banks have committed to quoting firm
bid prices for the notes during business hours until the maturity
dates of the notes. This will ensure that retail investors can
liquidate their holdings in the secondary market. To facilitate the
Placing Banks to quote their offer prices, the HKMC reserves an
additional issue amount of 30% on the issued amount for further
draw down by the Placing Banks at any time during the life of the
notes. The Placing Banks have also committed to quoting firm offer
prices until the reserve amount is fully drawn down and will
continue to do so on a best effort basis.
Investors may subscribe for one or more of the above series of
notes. The actual subscription price for each of the two Hong Kong
dollar notes will be determined by reference to the corresponding
Exchange Fund Bill and Note as specified in the Issue Prospectus.
Each of the two US dollar notes will be offered at a price of
100.
The offer period will commence at 9:00 a.m. on 19 July 2005
(Tuesday) and end at 2:00 p.m. on 26 July 2005 (Tuesday). The
timetable for the issue is set out in Annex B. As applicants need
to have a bank account and an investment account with any one of
the Placing Banks whom they intend to instruct, they are encouraged
to submit applications early and not to wait until the closing date
of the offer period. The subscription money will only be deducted
from the applicant's account on the closing date.
Retail investors can obtain the Programme Prospectus and the
Issue Prospectus from any of the designated branches of the 17
Placing Banks (Annex C) or the office of the HKMC. Investors may
also access the website of the HKMC (www.hkmc.com.hk)
for details of the Issue.
"The success of HKMC's debt issues has been attributable to
HKMC's high credit ratings, which are the same as those of the Hong
Kong SAR Government, and to the wide range of notes that can meet
the different investment needs of retail investors," said Mr Peter
Pang, Executive Director of the HKMC. "This move by the HKMC to
issue US dollar denominated bonds will help to promote the
development of a safe and efficient financial infrastructure for
Hong Kong, based on a multi-currency, multi-dimensional
platform."
Mr James H. Lau Jr., Chief Executive Officer of the HKMC, said,
"The HKMC will continue to devote resources to improve its debt
issuance programme. A mature retail bond market helps the HKMC to
broaden its funding sources and also improve investment
opportunities for investors."
The Hong Kong Mortgage Corporation Limited
18 July 2005
Annex
A (MS Word, 59KB)
Annex
B (MS Word, 39KB)
Annex
C (MS Word, 23KB)
