6th Silver Bond batch announced

June 29, 2021

Monetary Authority Executive Director Clara Chan:

The Silver Bond was first issued in 2016 with a view to providing a safe and flexible investment option for senior citizens including retirees. The Government will issue the sixth batch of Silver Bond this year. Compared with last year, there are two major changes. 

First, the eligible age for subscription will be lowered from 65 to 60. Second, the target issuance size will be increased from last year’s $10 billion to $24 billion. And depending on the situation, the Government may consider increasing it to a maximum of $30 billion. These two changes aim to benefit more people by way of the insurance of Silver Bond. 

Specifically, on the aspect of lowering the eligible age from 65 to 60, according to the original design, we required applicants to reach the age of 60 within the 2021-22 financial year - that is by the end of March 2022. 

But having regard to the reality that many senior citizens may not have their birthdate or month as shown on their Hong Kong ID (identity) card, we have decided to accept subscription by Hong Kong residents with valid Hong Kong ID cards who were born in or before 1962.

Other parameters of the Silver Bond are similar to those of last year. The tenor will be three years. Interest payments will be made every six months with an interest rate floor - that is the fixed rate - of 3.5%. In the event that inflation picks up and consistently goes beyond 3.5%, because of the inflation-linked nature of the floating rate portion of the Silver Bond, investors may get interest payments exceeding 3.5%.

For subscription, there will be nine business days running from 9am on July 20 (to) 2pm on July 30, and the Silver Bond will be issued on August 10. 

Applications can be made through the 20 placing banks and 24 designated securities brokers. We strongly encourage investors to submit their subscriptions by telephone or e-channels for the sake of social distancing.

The Government today announced the launch of the sixth batch of Silver Bond for subscription by eligible citizens. The target issuance size is $24 billion, with a tenor of three years.

At a press conference today, Monetary Authority Executive Director Clara Chan outlined two major changes to the new batch of Silver Bond compared with last year.

First, the eligible age will be lowered from 65 to 60, meaning that citizens who hold a valid Hong Kong identity card and born in 1962 or before may subscribe.

Second, the target issuance size will be increased from $10 billion to $24 billion. Considering market conditions, the Government may exercise discretion to increase the issuance size to a maximum of $30 billion.

“These two changes aim to benefit more people by way of the insurance of Silver Bond,” Ms Chan said.

Bond holders will be paid interest once every six months at a rate linked to Hong Kong’s inflation, subject to a minimum rate of 3.5%. As there will be no secondary market for the bond, bond holders may sell their bonds before maturity to the Government at par together with accrued but unpaid interest.

A maximum allocation amount of $1 million per investor will be imposed, ie each investor will be allocated 100 units of retail bond at most.

The subscription period will start from 9am on July 20 and end at 2pm on July 30. Eligible applicants may apply through one of the 20 placing banks and 24 designated securities brokers. The bond will be issued on August 10.

“We strongly encourage investors to submit their subscriptions by telephone or e-channels for the sake of social distancing,” Ms Chan added.