************************************************************
The Hong Kong Mortgage Corporation Limited (HKMC) is pleased to announce today (March 5) the launch of a new retail bond issue with four series of notes (the "Issue") under the HK$20 Billion Retail Bond Issuance Programme (the "Programme").
The coupons and subscription prices of the notes are as follows, and the terms and conditions are highlighted in Annex A.
Series Currency Tenor Coupon Subscription
(payable Price
semi
-annually)
A HKD 2 years 4.18% It will be
fixed by
reference
to the
corresponding
EFN on
March 15,
2007
B USD 2 years 4.80% 100%
C USD 6 years 0% 75.2%
(Zero (repaid at
Coupon 100% upon
Bonds) maturity;
6-year total
return of
around
33.0%)
D HKD 1 year 5.25% 100%
(extendable times
semi an Accrual
-annually Factor *
until
March 21,
2011)
* Accrual factor is equal to the actual number of days on which 3-month HIBOR falls within the range of 0% ― 5.25% p.a. divided by the actual number of days in the relevant period.
The HKMC today signed an agreement with the three Underwriting Banks, namely, Bank of China (Hong Kong), HSBC and Standard Chartered Bank (Hong Kong) for a total underwriting amount of HK$600 million in respect of the 2-year Hong Kong dollar notes of the Issue.
Under the Programme, the HKMC has appointed 17 banks from the Dealer Group as Placing Banks to distribute the Issue to retail investors. They are Bank of China (Hong Kong), Bank of Communications Hong Kong Branch, Bank of East Asia, China Construction Bank (Asia), Chiyu Bank, Chong Hing Bank, CITIC Ka Wah Bank, Dah Sing Bank, DBS Bank (Hong Kong), Hang Seng Bank, HSBC, ICBC (Asia), Nanyang Commercial Bank, Shanghai Commercial Bank, Standard Chartered Bank (Hong Kong), Wing Hang Bank and Wing Lung Bank.
The Placing Banks will also perform the role of market makers for the Issue to facilitate transactions in the secondary market. This offering mechanism through Placing Banks was first introduced by the HKMC in 2001 and has proven highly effective in marketing bonds to retail investors. So far, the HKMC has issued nine retail bond issues totalling HK$12 billion.
HKMC retail bonds provide investors with the choice of an additional investment product to achieve a balanced investment portfolio and stable interest income. For this new issue, the HKMC is issuing 2-year retail bonds denominated in both Hong Kong dollar and US dollar to provide more investment choices. Moreover, it is the first time the HKMC launches HIBOR-linked notes which are popular among the private banking and institutional markets. It is also the first time that a US dollar zero coupon bond product has been offered to the retail public in Hong Kong.
Mr Peter Pang, Executive Director of the HKMC said, "Today's issue is the first retail bond issue after the HKMC has received a rating upgrade from Moody's in October last year ― Aaa for domestic currency debt and Aa1 for foreign currency debt. The top credit rating puts the Corporation in a very strong position to play a more active and strategic role in promoting the development of the debt and securitisation markets in Hong Kong while creating a win-win situation for the investors, the Placing Banks and the Corporation."
Mr James H. Lau Jr., Chief Executive Officer of the HKMC, said, "The HKMC will continue with its product innovation to meet the needs of retail bond investors by providing a wider range of debt investment instruments."
The offer period will commence at 9am on March 6, 2007 (Tuesday) and end at 2pm on March 13, 2007 (Tuesday). The timetable for the issue is set out in Annex B. As applicants need to have a bank account and an investment account with any one of the Placing Banks whom they intend to instruct, they are encouraged to submit applications early and not to wait until the closing date of the offer period. The subscription money will only be deducted from the applicant's account on the closing date.
Retail investors can obtain the Programme Prospectus and the Issue Prospectus from any of the designated branches of the 17 Placing Banks (Annex C) or the office of the HKMC. Investors may also access the website of the HKMC (www.hkmc.com.hk) for details of the Issue.
Ends/Monday, March 5, 2007
Issued at HKT 18:58
NNNN