1. What Is the Silver Bond?

The Silver Bond is a retail bond issued by the Hong Kong Special Administrative Region (HKSAR) Government, designed specifically for senior citizens. Since its launch, it has aimed to provide Hong Kong residents aged 60 or above with a low-risk, stable investment option while enabling the government to raise long-term funding through the capital market. A key feature of the Silver Bond is principal protection, with interest rates linked to Hong Kong’s Consumer Price Index (CPI), ensuring that investors can enjoy steady returns even in an inflationary environment.

2. When Will the 2025 Silver Bond Be Issued?

According to the Hong Kong Monetary Authority, the new batch of Silver Bonds will be officially issued on October 10, 2025. The target issuance size is HK$50 billion, with a possible upward adjustment to HK$55 billion depending on market demand. The bond will mature in October 2028, offering a guaranteed minimum annual interest rate of 3.85%, subject to adjustment based on inflation.

3. Key Features of the Silver Bond

As with previous issuances, the 2025 Silver Bond comes with principal protection, meaning the government will fully repay the principal at maturity. The interest rate is tied to Hong Kong’s CPI, allowing investors to potentially benefit from higher returns during periods of inflation. In addition, interest payments will be made semi-annually, providing investors with a stable stream of cash flow.

4. Subscription Eligibility and Limits

Subscription is limited to Hong Kong residents aged 60 or above. The minimum subscription amount is HK$10,000, while the maximum is HK$1 million per investor. Applications can be made through designated placing banks or securities brokers. The bond is not tradable in the secondary market; however, investors who require liquidity may redeem it early, with the government repurchasing the bond at principal plus accrued interest.

5. Advantages and Potential Risks of the Silver Bond

The main advantage of the Silver Bond lies in its low-risk nature, backed by the Hong Kong Government, which guarantees repayment of both principal and interest. As the interest rate is linked to inflation, investors can enjoy higher returns during inflationary periods. Semi-annual interest payments also provide retirees with stable cash flow, making the bond suitable for seniors who rely on investment income to support their retirement life.

On the other hand, risks mainly stem from limited liquidity, as the bond cannot be freely traded in the secondary market and can only be redeemed early through the government’s buyback mechanism. Flexibility is therefore restricted. Moreover, if market interest rates rise significantly, the return from Silver Bonds may lag behind other investment products, resulting in opportunity costs. Finally, since the interest rate adjustment is based on the CPI of the past six months, there is a lag in reflecting rapidly rising inflation.