HKMA to Launch 2-Year Exchange Fund Notes: What Investors Need to Know
By Felix Pinkston
Publication Date: May 14, 2025
In a significant development for the financial landscape, the Hong Kong Monetary Authority (HKMA) is set to conduct a tender for 2-year Exchange Fund Notes on May 23, 2025. This move aims to roll over maturing notes valued at HK$1,200 million, featuring an appealing interest rate of 2.16%. The settlement of these notes will be finalized on May 26, 2025.
Tender Breakdown: Key Details You Should Not Miss
The upcoming tender offers a total of HK$1,200 million in notes, with HK$5 million specifically set aside for non-competitive bids from the public via the Hong Kong Securities Clearing Company Limited (HKSCC). Should public interest fall short in this section, any remaining funds will be allocated to the competitive tender, which initially stands at HK$1,195 million.
These notes will mature on May 26, 2027, and offer a robust annual interest rate of 2.16%, with interest payments made semi-annually. This is an attractive opportunity for both retail and institutional investors looking for stable returns.
How to Participate: A Quick Guide
If you’re interested in participating in the tender, here’s how you can get involved:
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Non-Competitive Bids: Public investors can place non-competitive bids through Stock Exchange Participants or Brokers. If you have an Investor Account within the Central Clearing and Settlement System (CCASS), you can apply directly through HKSCC.
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Competitive Bids: For competitive tenders, submissions should be directed through the HKMA’s appointed Eligible Market Makers. Note that each competitive bid requires a minimum investment of HK$50,000 or multiples thereof.
- Result Announcements: The HKMA will publish the results on its official website, and they will also be displayed on platforms like Refinitiv and Bloomberg. If you submitted non-competitive bids through HKSCC, you can check the results via your broker or CCASS terminal.
Important Timeline
The tender, labeled as Issue Number 02Y2705 with stock code 4105 (EFN 2.16 2705), is scheduled to take place between 9:30 a.m. and 10:30 a.m. on the designated date. The HKMA highly recommends reviewing the Information Memorandum for more details or contacting one of the Eligible Market Makers, HKSCC, or brokers listed as Exchange Participants on the Stock Exchange of Hong Kong.
Why This Matters to the Crypto Community
As cryptocurrency and blockchain technologies continue to grow, understanding the interconnectedness of traditional finance and digital assets is crucial. The issuance of these Exchange Fund Notes could have implications for crypto markets as institutional investors may view stable products as a hedge during volatile periods.
Investors in the crypto sphere may find opportunities in the evolving financial landscape shaped by events like this one. Keep an eye on these developments; they could provide valuable insights into market trends and investment strategies.
For more comprehensive information, the HKMA’s full announcement can be accessed here.
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