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 and subscription prices of the notes are as follows,
and the terms and conditions are highlighted in Annex A.
Series | Currency | Tenor | Coupon (payable semi-annually) |
Subscription Price |
A |
HKD |
2 years |
4.18% |
It will be fixed by reference to the corresponding EFN on 15 |
B |
USD |
2 years |
4.80% |
100% |
C |
USD |
6 years |
0% |
75.2% |
D |
HKD |
1 year |
5.25% times an Accrual Factor * |
100% |
* Accrual factor is equal to the actual number
of days on which 3-month HIBOR falls within the range of 0% - 5.25%
p.a. divided by the actual number of days in the relevant
period.
The HKMC today signed an agreement with the three Underwriting
Banks, namely, Bank of China (Hong Kong), HSBC and Standard
Chartered Bank (Hong Kong) for a total underwriting amount of
HK$600 million in respect of the 2-year Hong Kong dollar notes of
the Issue.
Under the Programme, the HKMC has appointed 17 banks from the
Dealer Group as Placing Banks to distribute the Issue to retail
investors. They are Bank of China (Hong Kong), Bank of
Communications Hong Kong Branch, Bank of East Asia, China
Construction Bank (Asia), Chiyu Bank, Chong Hing Bank, CITIC Ka Wah
Bank, Dah Sing Bank, DBS Bank (Hong Kong), Hang Seng Bank, HSBC,
ICBC (Asia), Nanyang Commercial Bank, Shanghai Commercial Bank,
Standard Chartered Bank (Hong Kong), 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 nine retail
bond issues totalling HK$12 billion.
HKMC retail bonds provide investors with the choice of an
additional investment product to achieve a balanced investment
portfolio and stable interest income. For this new issue, the HKMC
is issuing 2-year retail bonds denominated in both Hong Kong dollar
and US dollar to provide more investment choices. Moreover, it is
the first time the HKMC launches HIBOR-linked notes which are
popular among the private banking and institutional markets. It is
also the first time that a US dollar zero coupon bond product has
been offered to the retail public in Hong Kong.
Mr Peter Pang, Executive Director of the HKMC said, "Today's
issue is the first retail bond issue after the HKMC has received a
rating upgrade from Moody's in October last year - Aaa for domestic
currency debt and Aa1 for foreign currency debt. The top credit
rating puts the Corporation in a very strong position to play a
more active and strategic role in promoting the development of the
debt and securitisation markets in Hong Kong while creating a
win-win situation for the investors, the Placing Banks and the
Corporation."
Mr James H. Lau Jr., Chief Executive Officer of the HKMC, said,
"The HKMC will continue with its product innovation to meet the
needs of retail bond investors by providing a wider range of debt
investment instruments."
The offer period will commence at 9:00 a.m. on 6 March 2007
(Tuesday) and end at 2:00 p.m. on 13 March 2007 (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 Hong Kong Mortgage Corporation Limited
5 March 2007
The Hong Kong Mortgage Corporation Limited
HKMC208 2-year
HKD 4.18% Notes due March 2009
HKMC209 2-year
USD 4.80% Notes due March 2009
HKMC601 6-year
USD Zero Coupon Bonds due March
2013
HKMC104E
1-year HKD HIBOR-Linked Notes due March 2008 (extendable
semi-annually to March 2011)
Major Terms of
the Retail Bond Issue
Issuer | The Hong Kong Mortgage Corporation Limited (HKMC) Wholly-owned by the Hong Kong SAR Government through the Exchange Fund |
Issuer's Credit Ratings | Local currency: Aaa (Moody's); AA (S&P) Foreign currency: Aa1 (Moody's); AA (S&P) Long-term issuer ratings |
Issue Number | HKMC208 ("Series A") HKMC209 ("Series B") HKMC601 ("Series C") HKMC104E ("Series D") |
Minimum Issue Amount | HK$10 million for each of Series A and D; US$5 million for each of Series B and C. The HKMC reserves the right to increase the issue amount of each series of notes. |
Subscription Period | 9:00 a.m. on 6 March 2007 to 2:00 p.m. on 13 March 2007 |
Issue Date | 19 March 2007 |
Maturity Date | Series A: 19 March 2009 Series B: 19 March 2009 Series C: 19 March 2013 Series D: 19 March 2008 (extendable semi-annually until 21 March 2011 at the option of the Issuer) |
Denomination | HK$50,000 for Series A and D; US$5,000 for Series B and C |
Coupon | Series A: 4.18% p.a., payable semi-annually Series B: 4.80% p.a., payable semi-annually Series C: 0% (Zero Coupon Bonds) Series D: 5.25% p.a. times an Accrual Factor, payable semi- annually For Series A, B and D Notes, interest is payable on the 19th day |
Accrual Factor (for Series D only)
|
Accrual Factor equals to N/M N = Total number of calendar days in the relevant observation M = Total number of calendar days in the relevant observation Interest will accrue on a daily basis when 3-month HIBOR is within |
Range (for Series D only) |
0% to 5.25% p.a. (highest and lowest rates inclusive) |
Annualised Yield |
Series A: 4.22% p.a. (at price = 100%) Series B: 4.86% p.a. (at price = 100%) Series C: 4.86% p.a. (at price = 75.2%), or a 6-year total return of around 33.0%# Series D: not applicable (# (100%-75.2%) / 75.2% = 33.0%) |
Application Price |
Series A: 102% of the principal amount of the notes Series B: 100% of the principal amount of the notes Series C: 75.2% of the principal amount of the notes Series D: 100% of the principal amount of the notes |
Subscription Price | Series A: The Subscription Price will be the actual purchase price of the notes determined at or around 11:30 a.m. on 15 March 2007. The annualised yield of the Series A notes will be fixed so as to equal to a spread of 0.10% over the annualised yield of Exchange Fund Note series EFN 02Y0902. Series B: 100% of the principal amount of the notes Series C: 75.2% of the principal amount of the notes (repaid at Series D: 100% of the principal amount of the notes |
Handling Fee | Investors will pay a handling fee of 0.15% on the Subscription Price of the notes allotted to them. |
Market Making | For Series A, B and C: The Placing Banks will quote bid prices for the notes during business hours until the maturity dates of the notes. 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 issuance at any time during the life of the notes. For Series D: The Placing Banks will quote bid prices for the |
THE HONG KONG
MORTGAGE CORPORATION LIMITED
HKMC208 2-year
HKD 4.18% Notes due March 2009
HKMC209 2-year
USD 4.80% Notes due March 2009
HKMC601 6-year
USD Zero Coupon Bonds due March 2013
HKMC104E
1-year HKD HIBOR-Linked Notes due March 2008 (extendable
semi-annually to March 2011)
Issuance
Timetable
Commencement Date for Application | : | 6 March 2007 (Tuesday), 9:00 a.m. |
Closing Date for Application | : | 13 March 2007 (Tuesday), 2:00 p.m. |
Price-fixing Date for Series A Notes | : | 15 March 2007 (Thursday) at or around 11:30 a.m. |
Issue Date | : | 19 March 2007 (Monday) |
THE HONG KONG MORTGAGE CORPORATION LIMITED
HKMC208 2-year
HKD 4.18% Notes due March 2009
HKMC209 2-year
USD 4.80% Notes due March 2009
HKMC601 6-year
USD Zero Coupon Bonds due March 2013
HKMC104E 1-year
HKD HIBOR-Linked Notes due March 2008 (extendable semi-annually to
March 2011)
Designated
Branches of the Placing Banks for
Handling the Applications for HKMC's Retail Notes
The list of designated branches of Placing Banks can be obtained
through their enquiry hotlines.
Enquiry Hotlines
Bank of China (Hong Kong) Limited | 3669-3668 |
Bank of Communications Co., Ltd. Hong Kong Branch | 2269-9699 |
The Bank of East Asia, Limited | 2211-1311 |
China Construction Bank (Asia) Corporation Limited | 2805-2383 |
Chiyu Bank Corporation Limited | 2232-3633 |
Chong Hing Bank Limited | 2161-6888 |
CITIC Ka Wah Bank Limited | 2287-6788 |
Dah Sing Bank, Limited | 2828-8001 |
DBS Bank (Hong Kong) Limited | 2290-8888 |
Hang Seng Bank Limited | 2998-9898 |
The Hongkong and Shanghai Banking Corporation Limited | 2269-2121 |
Industrial and Commercial Bank of China (Asia) Limited | 2189-5588 |
Nanyang Commercial Bank, Limited | 2622-2633 |
Shanghai Commercial Bank Limited | 2818-0282 |
Standard Chartered Bank (Hong Kong) Limited | 2886-8868 |
Wing Hang Bank, Limited | 3199-9182 |
Wing Lung Bank Limited | 2526-5555 |