Hong Kong Reopens RMB 1.25B Government Bond Tender Amid Yuan Liquidity Push

The Hong Kong Monetary Authority will reopen its 10-year RMB government bond issue next Thursday, offering an additional RMB 1.25 billion ($171 million) as the city accelerates efforts to cement its position as the premier offshore yuan hub.

The tender, scheduled for February 5 with settlement on February 9, comes just days after China's central bank committed to supporting the HKMA in doubling yuan liquidity available to local banks.

Bond Details and Pricing

The reopening targets existing issue 10GB3505001 under Hong Kong's Infrastructure Bond Programme. Key terms include a 2.29% annual coupon paid semi-annually, with bonds maturing May 15, 2035. Current indicative pricing sits at 101.27, translating to a semi-annualized yield of 2.138%.

For context, the previous tender of this same issue in November 2025 cleared at an average price of 101.28, implying a 2.151% annualized yield. The slight yield compression suggests steady institutional appetite for Hong Kong government paper.

Minimum tender amounts start at RMB 50,000, with successful bidders paying RMB 263.51 in accrued interest per minimum denomination on settlement.

Broader Yuan Internationalization Play

This issuance fits into a coordinated push between Beijing and Hong Kong to expand RMB market infrastructure. On January 26, China's central bank announced plans to explore launching government bond futures in Hong Kong—a development that would significantly deepen the offshore yuan derivatives market.

The timing also coincides with China Development Bank's Hong Kong branch completing its first-ever RMB 5.5 billion public bond offering in Macau on January 28, signaling growing regional coordination on yuan-denominated debt markets.

What Institutional Investors Need to Know

The bonds carry several structural advantages: they're exempt from Hong Kong profits tax and stamp duty, backed by the HKSAR Government's general obligations, and fully fungible with existing 10GB3505001 bonds already listed on the Hong Kong Stock Exchange under stock code 85024.

Proceeds fund infrastructure projects under Hong Kong's established Infrastructure Bond Framework. Only Primary Dealers can submit tenders, though institutions can access the offering through any dealer on the HKMA's published list.

Tender results will hit Bloomberg (GBHK) and Refinitiv by 3:00 pm on February 5. With Beijing actively backing expanded yuan liquidity in Hong Kong, demand for government-backed RMB paper could run strong.