The issuance comprises four tranches across multiple currencies, marking the world’s largest digital bond offering to date, according to the announcement. The Hong Kong dollar and yuan tranches can be settled using e-HKD and e-CNY – digital versions of the fiat currencies built on blockchain technology – alongside traditional settlement methods.
“This marks the first digital bond offering in the world that integrates tokenised central bank money in the form of e-CNY and e-HKD in the settlement process” to “further reduce settlement time, costs and counterparty credit risk”, the HKMA said.
Investors buying the HK$2.5 billion, two-year tranche will receive 2.5 per cent interest annually for two years. The 2.5 billion yuan (US$351 million), five-year tranche pays 1.9 per cent annually, the US$300 million, three-year tranche yields 3.633 per cent and the 300 million euro (US$348 million), four-year tranche pays 2.512 per cent.
The offering attracted total demand of more than HK$130 billion, with subscriptions coming from a wide range of global institutional investors including asset managers, banks, insurance companies and private banks, the announcement said.