Good afternoon,
Ladies and gentlemen,
1. On behalf of the Hong Kong Mortgage Corporation, I welcome
you all to this signing ceremony to launch the three billion US
dollar Medium Term Note Programme.
2. While our city is bustling with festivities to celebrate the
tenth anniversary of the establishment of the Hong Kong SAR, I am
pleased to note that this is also a very special year for the HKMC,
as the Corporation was also established ten years ago in March
1997. Over the past decade, the HKMC has fulfilled its mandate to
promote the development of the primary and secondary mortgage
markets in Hong Kong. In doing so, it has contributed to the
stability of Hong Kong's banking sector and the development of the
housing and debt markets.
3. For Hong Kong, the last decade has been punctuated by shocks
from the Asian Financial Crisis, SARS and their aftermaths,
including substantial disruptions to our housing and financial
markets. The HKMC, with its Mortgage Purchase Programme, has played
an important part in providing liquidity to the banking sector and
helping it weather those shocks. In addition, the Corporation's
Mortgage Insurance Programme is an effective tool for the promotion
of home ownership through reducing the down payment burden for
homebuyers, without causing additional credit risk for the lending
banks.
4. Insofar as debt market development is concerned, the HKMC has
been the most active corporate issuer of Hong Kong Dollar debt for
the past six years. The Corporation is also an innovator in debt
issuance in both the retail and institutional markets, helping to
meet the investment needs of individuals and institutional
investors. In October 2006, the Corporation became the first Hong
Kong institution to be rated Triple-A for local currency by Moody's
and remains the only institution to achieve this status so far. The
Corporation is therefore in a very strong position to continue to
play an active and strategic role in promoting the development of
the debt and securitisation markets in Hong Kong.
5. Notwithstanding the past successes, the Corporation is alive
to changes in the business environment that may affect the way in
which it achieves its mandate. A comprehensive review of the
Corporation's business strategy was therefore conducted last year.
The review re-affirmed, among other things, the strategic
importance of the Corporation in the provision of contingent
liquidity to the banking sector, especially in times of crisis, and
identified a corresponding need to sustain its business. Therefore,
the HKMC will continue to fulfil its primary mandate through an
expansion in scope. The expansion will be in two directions. First
is to broaden its scope of business domestically and second is to
play a role in the development of housing finance markets in the
region.
6. The HKMC is well positioned to share its experience and
expertise with markets in the region in the areas of mortgage
purchase, mortgage insurance and securitisation. The Corporation is
particularly well placed to contribute to market developments in
Mainland China, consistent with Hong Kong's response to China's
11th Five-Year Plan to contribute to the nation's economic
development and financial system reforms.
7. It is against this background that the HKMC has embarked on a
new multi-currency Medium Term Note Programme. The Programme will
provide a platform for the HKMC to broaden its investor base and
funding sources in the international market. Issuing Medium-Term
Notes will also help to set a quasi-sovereign benchmark for Hong
Kong to further promote the development of the regional bond
market. Great care has been taken to design this Programme to
provide a convenient, flexible and cost-efficient platform for the
issuance of debt denominated in currencies such as the Hong Kong
dollar, US dollar, euro and yen.
8. This Programme will be a key instrument for the Corporation
to develop its business activities in the region. I would like to
take this opportunity to thank HSBC and JP Morgan, the Joint
Arrangers of the Programme, for their valuable advice and support
to bring the Programme to the market. We are also grateful to other
members of the Dealer Group, namely Barclays Capital, BNP Paribas,
Citi, Deutsche Bank, Goldman Sachs, Nomura International, Standard
Chartered Bank and UBS Investment Bank for their staunch support. I
look forward to your active participation to arrange public and
private issues under this Programme, and further promote Hong Kong
as an international financial centre.
Thank you.
