Results of non-competitive tender for Exchange Fund Notes No. 2508

The Hong Kong Monetary Authority (HKMA) announced today (12 August 2003) that the portion of the 2-year Exchange Fund Notes (Issue Number 2508) available for non-competitive tender has been over-subscribed. The subscription price of the non-competitive tender has been set at 99.68 (annualised yield of 1.85%), which was the average accepted price for the portion of the Notes reserved for competitive tender by Recognized Dealers.

Public subscription for the portion of the Notes available for non-competitive tender closed at 12:00 noon on 8 August 2003. The issue was well received by retail investors. Over 900 investors have submitted applications through Bank of East Asia, DBS Bank (Hong Kong) and Wing Lung Bank, the three Retail Exchange Fund Notes Distributors appointed by the HKMA. The total application amount stood at about HK$268 mn, which was 1.24 times above the amount of HK$120 mn available for non-competitive tender.

Mr Norman Chan, Deputy Chief Executive of the HKMA, said, "The favourable response to the non-competitive tender of the Notes suggests significant potential demand for high quality Hong Kong dollar debt securities among retail investors. Through offering of Exchange Fund Notes for non-competitive tender by the public on a regular basis, the HKMA hopes to cultivate sustained interest and raise awareness among the public in the Notes, and in debt securities products as a whole".

Since the amount of the Notes available for non-competitive tender have been oversubscribed, according to the allotment rules specified in the Information Memorandum of the Exchange Fund Note Programme, each application will be allotted at least a minimum of HK$50,000 of the Notes. Notes remaining will be allocated to each application on a pro rata basis to the remaining quantity of Notes applied for by each application, rounded down to the nearest whole Note and in the case of Notes remaining after rounding, by ballot. Retail investors may check with the Retail Exchange Fund Notes Distributors through which they applied for the Notes the amount of Notes allotted to them.

The next non-competitive tender to be held will be for the re-opening of an existing 5-year issue with remaining maturity of 38 months. The tender is tentatively scheduled on 15 October 2003. Details of the Notes will be announced on 6 October 2003 and the subscription period will run from 9:00 a.m. on 6 October 2003 to 12:00 noon on 13 October 2003.

Hong Kong Monetary Authority
12 August 2003