9.
Inaugural issue of 7-Year exchange fund notes well received
There was a good market response to the tender today (Monday) for the first issue of 7-year exchange fund notes, which matures in 2002, according to the Hong Kong Monetary Authority (HKMA).
The 7-year notes, which carried a coupon rate of 6.82% were 6.64 times oversubscribed.
The average accepted tender price was 99.86, providing an annualised yield of 6.96%, or about 106 basis points above that for 7-year US Treasury notes.
"The result of this landmark tender is very encouraging," said the Chief Executive of HKMA, Mr Joseph Yam.
"The successful launch of the 7-year notes has established an important and reliable benchmark for Hong Kong dollar debt in the seven year area.
"The high oversubscription ratio reflects a strong demand from the market on longer-dated Exchange Fund paper, and the strong investor confidence in the link exchange rate system and the future of Hong Kong."
The introduction of the 7-year notes marks another milestone in the development of the Exchange Fund Note Programme which was introduced in May 1993, with the launch of 2-year Notes to replace the 2-year government bonds. This was followed by the launch of 3-year notes in October 1993 and 5-year notes in September last year.
End/Monday, November 27 1995
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