XN000022-1984-03-14 — Page 6

WEDNESDAY, MARCH 14, 1984

5

-

GOOD PROGRESS ON WORK FOR BOND ISSUE

****

TO BENEFIT FROM PREVAILING LOW INTEREST RATES, PREPARATIONS BEGAN A FEW WEEKS AGO ON THE PROPOSED ISSUE OF GOVERNMENT BONDS OF UP TO $1 BILLION AND WORK HAS PROGRESSED SATISFACTORILY, THE FINANCIAL SECRETARY, THE HON SIR JOHN BREMRIDGE, TOLD THE

EGISLATIVE COUNCIL TODAY.

SIR JOHN PROPOSED THAT THE BONDS BE OFFERED FOR SALE ON MARCH 30, 1984, WITH TENDERS CLOSING ON APRIL 9.

HE WAS MOVING A MOTION SEEKING AUTHORITY TO RAISE THE LOAN IN HONG KONG UNDER THE LOANS (GOVERNMENT BONDS) ORDINANCE.

THE ISSUE WILL BE IN THE FORM OF FIXED-RATE HONG KONG DOLLAR DENOMINATED BEARER BONDS WITH A TERM OF FIVE YEARS.

THEY WILL HAVE A FACE VALUE OF $50 000, WITH INTEREST PAYABLE HALF YEARLY.

IT IS, HOWEVER, PREMATURE TO DECIDE NOW ON THE COUPON AND THE MINIMUM TENDER PRICE, WHICH SHOULD, FOR OBVIOUS REASONS, BE DETERMINED AT THE LATEST POSSIBLE MOMENT, SIR JOHN SAID,

IN CONSIDERING TENDERS, THOSE WITH THE HIGHEST OFFERED PRICES WOULD BE ACCEPTED TO THE EXTENT REQUIRED TO ATTAIN THE AMOUNT BEING RAISED, HE SAID.

+THIS IS SUBJECT, AS ALWAYS, TO THE PROVISIONS THAT THE GOVERNMENT RESERVES THE RIGHT TO ACCEPT OR REJECT ANY OR ALL TENDERS IN WHOLE OR IN PART AND THAT NO TENDER WILL BE CONSIDERED WHERE THE PRICE OFFERED IS LESS THAN THE MINIMUM PRICE, SIR JOHN ADDED.

THE ISSUE PRICE WILL BE THE PRICE OF THE LOWEST TENDER OR TENDERS ACCEPTED IN WHOLE OR IN PART, HE EXPLAINED.

AS AN EXAMPLE, HE SALD, LET US SUPPOSE THAT $500 MILLION WORTH OF BONDS ARE TENDERED AT, SAY, 105 PER CENT OF THE FACE VALUE, $500 MILLION AT 104 PER CENT AND $500 MILLION AT 103 PER CENT.

+AS WE ONLY NEED $1 000 MILLION, THOSE WHO TENDERED AT 105 AND 104 WOULD RECEIVE A FULL ALLOCATION AND TENDERS PRICED AT 103 WOULD BE REJECTED. ALL SUCCESSFUL TENDERERS WOULD PAY FOR THE BONDS AT THE LOWEST ACCEPTED PRICE OF 104.+

IT IS INTENDED THAT THE BONDS WILL BE SPECIFIED AS LIQUID ASSETS UNDER THE BANKING AND DEPOSIT-TAKING COMPANIES ORDINANCES.

INTEREST PAYMENTS AS WELL AS PROFITS ON THE SALE OF THE BONDS WILL BE EXEMPT FROM PROFITS TAX AND INTEREST TAX.

/+I PROPOSE