Hong Kong mortgage securities company issues 12 billion Hong Kong dollars in the first public offering of digital bonds.

On June 11th, a mortgage securities company in Hong Kong announced the successful pricing of the first batch of public digital bonds, with a total value of approximately HK$12 billion, under its $30 billion mid-term bond issuance plan. After a series of successful pre-sale promotion activities and investor roadshows, the bonds were officially priced and documented in Hong Kong yesterday. This transaction is the largest digital bond issuance globally to date, highlighting the ample liquidity in the relevant market and the accelerating trend of institutional investors accepting digital bonds. Through this issuance, the mortgage securities company in Hong Kong becomes the first public institution in Hong Kong to issue digital bonds. Additionally, the five-year Hong Kong dollar bonds issued in this transaction set a new benchmark for the Hong Kong dollar bond market as the longest tenure to date. The digital bonds issued in this transaction include three tranches: HK$6 billion for a two-year period, HK$2.5 billion for a five-year period, and RMB 3 billion for a three-year period. The issuance drew strong interest from diverse high-quality institutional investors, following the successful model used by the Hong Kong government for digital bond issuances. These investors include local, Southbound Bond Connect, and international institutional investors such as multilateral development banks, central banks, banks, private banks, insurance companies, and asset management companies. The total subscription amount during the peak period of this issuance reached approximately HK$24 billion equivalent, coming from over 100 accounts. It is reported that the digital bonds were generated using distributed ledger technology, with the platform operated by the Central Clearing System for Debt Securities, which also acts as the settlement and clearing system for the digital bonds. This issuance marks an important milestone in the digital financial development journey of the mortgage securities company in Hong Kong. Key features include issuing in digital native form to enhance operational efficiency, allowing investors to trade the bonds through the existing infrastructure of the Central Clearing System for Debt Securities linked to Euroclear and Clearstream accounts, and successfully reducing the settlement cycle from five working days to three. Lee Tat-chi, Deputy Chief Executive and Executive Director of the mortgage securities company, stated, "By introducing tokenized fixed income products and driving market innovation, the mortgage securities company demonstrates firm support for the Hong Kong government's strategic roadmap to consolidate Hong Kong as a global fixed income and currency center. This milestone digital bond issuance deepens Hong Kong's digital asset ecosystem, accelerates the adoption of tokenization technology in the fixed income market, and inspires more issuers, investors, intermediaries, and other industry stakeholders to embrace this innovative financial instrument." Bock Yuen, Executive Director and President of the mortgage securities company, commented, "With effective pre-sale promotion activities and investor roadshows, the mortgage securities company's inaugural digital bond issuance was successfully priced in a market with strong demand. This milestone underscores the growing participation of underwriting banks and initial investors in digital bonds. It strengthens Hong Kong's unique position in bridging traditional finance with the digital asset era. Looking ahead, the mortgage securities company will continue to leverage its strengths to further develop the local bond market."