Joerg Hiller
Aug 06, 2026 09:19
HKMA declares tender of HK$1.5B 1-year HONIA-indexed floating charge notes beneath Infrastructure Bond Programme, set for Aug. 12, 2026.
The Hong Kong Financial Authority (HKMA) introduced the tender of HK$1.5 billion in 1-year HONIA-indexed Floating Charge Notes, scheduled for Wednesday, August 12, 2026. These bonds, issued beneath the Infrastructure Bond Programme, will choose August 13 and mature on August 13, 2027, carrying curiosity pegged to the Hong Kong Greenback In a single day Index Common (HONIA).
HONIA serves as Hong Kong’s various reference charge, providing a close to risk-free benchmark derived from precise in a single day interbank lending transactions. Comparatively, the extra widely known HIBOR (Hong Kong Interbank Supplied Charge) is a forward-looking time period charge primarily based on quoted financial institution funding prices. Whereas each benchmarks coexist, HONIA has more and more gained traction as a reference charge for floating-rate devices, together with authorities bonds just like the one-year notes supplied on this tender.
The tender shall be open completely to Main Sellers beneath the Infrastructure Bond Programme. Bids should be submitted in increments of HK$50,000 by way of these sellers. Outcomes shall be revealed by 3:00 p.m. on the tender day by way of the HKMA web site, the Hong Kong Authorities Bonds web site, Bloomberg, and Refinitiv. The problem worth is about at par, with curiosity funds scheduled quarterly in arrears.
Current HONIA knowledge, as of July 24, 2026, reveals a compounded 30-day common charge of two.50595%. This charge will affect the curiosity payable on the notes, which shall be listed to the sum of the compounded HONIA common and the very best accepted unfold at tender. Notably, the speed is topic to a minimal of 0% per interval.
The proceeds from the notes shall be allotted to infrastructure tasks beneath the Infrastructure Bond Framework, furthering Hong Kong’s growth objectives. Buying and selling on the Inventory Change of Hong Kong is predicted to start on August 14, 2026.
This marks the newest in a sequence of HONIA-based issuances by the HKMA, with the same providing carried out in Could 2026. These efforts underscore the rising institutional adoption of HONIA, which has been a cornerstone of the town’s transition towards transaction-based reference charges. Nonetheless, HIBOR stays broadly utilized in mortgage and mortgage pricing, with 73.8% of recent HKD mortgage loans in Could 2026 nonetheless tied to HIBOR.
Market members shall be watching the tender carefully as it is going to present perception into demand for HONIA-linked devices amid broader rate of interest dynamics. Given HONIA’s standing as a close to risk-free charge, the unfold on these notes may function a proxy for institutional urge for food and threat sentiment in Hong Kong’s debt markets.
Picture supply: Shutterstock
