The Hong Kong Mortgage Corporation Limited (HKMC) is pleased to announce the launch of 2-year notes of HK$500 million under its HK$20 Billion Note Issuance Programme (NIP). The new issue will carry a coupon of 6.05% (payable semi-annually). It will be tendered on 13 December 2000 (Wednesday). The key terms and conditions and timetable for the issue are set out in Annex 1.
The issue will be divided into two portions for allocation in the primary market. The bigger portion, with a size of HK$400 million, will be restricted for competitive bidding by the Recognised Dealers under the tendering mechanism administered by the Hong Kong Monetary Authority (HKMA) for Exchange Fund paper and Specified Instruments (including NIP notes). A separate portion of HK$100 million will be set aside for non-competitive bidding by retail investors.
This is the third NIP issue with a retail tranche. The objective of this initiative is to further enhance the HKMC's fund-raising capabilities by broadening its investor base to include retail investors and to promote the development of an active retail bond market in Hong Kong through providing an efficient platform for the retail public to invest in and trade the NIP Notes. Retail investors may submit their applications for the new issue by using Application Form or through banks, brokers or the Central Clearing and Settlement System (CCASS) under the Electronic Initial Public Offer method. The HKMC has appointed Hang Seng Bank as the receiving bank for the application forms and underwriter for the retail portion of the NIP notes.
The commencement date for retail investors to apply for the NIP notes is 5 December 2000. Applicants are required to return the application forms to the 12 designated branches of Hang Seng Bank (see Annex 2) by 12:00 noon on 11 December 2000 or to give electronic instructions through the CCASS by 3:45 p.m. on 11 December 2000.
Retail investors need only specify the amount they apply for in their application. The application amount for each retail investor is subject to a minimum denomination of HK$50,000 and a maximum limit of HK$10 million. The NIP notes will be allocated to them at the average accepted price of the successful bids of the Recognised Dealers in the competitive tender. If there is an over-subscription, allocation will be done through a combination of pro-rata allocation and balloting.
The trading of NIP notes is in scripless form. Transactions traded on the Stock Exchange of Hong Kong will be settled through CCASS.
Retail investors who are interested in subscribing for the NIP notes can obtain the prospectus, the supplemental prospectus and an application form from the offices of the HKMC and Hong Kong Securities Clearing Company Limited, the designated branches of Hang Seng Bank (see Annex 2), and the HKMC's website at www.hkmc.com.hk. A technical brief on the NIP notes is attached at Annex 3. Investors are also welcome to make enquiries through the HKMC Telephone Hotline at 2536 0103 or through the HKMC's e-mail address at bonds@hkmc.com.hk.
The Hong Kong Mortgage Corporation Limited
4 December 2000
