Retail infrastructure bond payment rate at 3.50 percent
The Hong Kong Monetary Authority announced the interest rate for the third payment of its retail infrastructure bonds due 2027. The rate is set at 3.50 percent per annum, with payment scheduled for June 17, 2026.
Payment determined by higher rate
The Hong Kong Monetary Authority (HKMA), representing the Hong Kong Special Administrative Region Government, announced the interest rate for the third payment of its retail infrastructure bonds, series 03GB2712R, due 2027.
The payment, scheduled for June 17, 2026, will be 3.50 percent per annum.
This rate was determined on June 3, 2026, as per the Issue Circular dated November 26, 2024.
The circular mandates that the interest rate is the higher of the prevailing Floating Rate and a Fixed Rate.
For this period, the Fixed Rate was 3.50 percent.
The Floating Rate, derived from the arithmetic average of year-on-year changes in the 2019/20-based Composite Consumer Price Index, was 1.47 percent.
As 3.50 percent exceeds 1.47 percent, it was selected as the final interest rate for the third payment.
These bonds, Stock Code 4286, are part of the Infrastructure Bond Programme.
Floating rate calculation details
The Floating Rate, calculated at 1.47 percent, is the arithmetic average of the year-on-year rates of change in the 2019/20-based Composite Consumer Price Index (CCPI).
This average comprises six monthly figures: November 2025 (+1.20%), December 2025 (+1.40%), January 2026 (+1.10%), and February, March, and April 2026 (each +1.70%).
These data points collectively yield the 1.47 percent Floating Rate.
This mechanism links a portion of the bond's return to inflation, providing a dynamic element to the interest payment.
The transparent use of the CCPI as a benchmark offers clarity and reinforces investor confidence in the bond's terms for retail participants.