THE HONG KONG MORTGAGE CORPORATION LIMTED
Opening Remarks at the Signing Ceremony for the
US$3 Billion Medium Term Note Programme
of the Hong Kong Mortgage Corporation
27 June 2007
Opening Remarks by Mr. Joseph Yam, Deputy Chairman
Good afternoon,
Ladies and gentlemen,
1. On behalf of the Hong Kong Mortgage Corporation, I welcome you all to this signing ceremony to launch the three billion US dollar Medium Term Note Programme.
2. While our city is bustling with festivities to celebrate the tenth anniversary of the establishment of the Hong Kong SAR, I am pleased to note that this is also a very special year for the HKMC, as the Corporation was also established ten years ago in March 1997. Over the past decade, the HKMC has fulfilled its mandate to promote the development of the primary and secondary mortgage markets in Hong Kong. In doing so, it has contributed to the stability of Hong Kong’s banking sector and the development of the housing and debt markets.
3. For Hong Kong, the last decade has been punctuated by shocks from the Asian Financial Crisis, SARS and their aftermaths, including substantial disruptions to our housing and financial markets. The HKMC, with its Mortgage Purchase Programme, has played an important part in providing liquidity to the banking sector and helping it weather those shocks. In addition, the Corporation’s Mortgage Insurance Programme is an effective tool for the promotion of home ownership through reducing the down payment burden for homebuyers, without causing additional credit risk for the lending banks.
4. Insofar as debt market development is concerned, the HKMC has been the most active corporate issuer of Hong Kong Dollar debt for the past six years. The Corporation is also an innovator in debt issuance in both the retail and institutional markets, helping to meet the investment needs of individuals and institutional investors. In October 2006, the Corporation became the first Hong Kong institution to be rated Triple-A for local currency by Moody’s and remains the only institution to achieve this status so far. The Corporation is therefore in a very strong position to continue to play an active and strategic role in promoting the development of the debt and securitisation markets in Hong Kong.
5. Notwithstanding the past successes, the Corporation is alive to changes in the business environment that may affect the way in which it achieves its mandate. A comprehensive review of the Corporation’s business strategy was therefore conducted last year. The review re-affirmed, among other things, the strategic importance of the Corporation in the provision of contingent liquidity to the banking sector, especially in times of crisis, and identified a corresponding need to sustain its business. Therefore, the HKMC will continue to fulfil its primary mandate through an expansion in scope. The expansion will be in two directions. First is to broaden its scope of business domestically and second is to play a role in the development of housing finance markets in the region.
6. The HKMC is well positioned to share its experience and expertise with markets in the region in the areas of mortgage purchase, mortgage insurance and securitisation. The Corporation is particularly well placed to contribute to market developments in Mainland China, consistent with Hong Kong’s response to China’s 11th Five-Year Plan to contribute to the nation's economic development and financial system reforms.
7. It is against this background that the HKMC has embarked on a new multi-currency Medium Term Note Programme. The Programme will provide a platform for the HKMC to broaden its investor base and funding sources in the international market. Issuing Medium-Term Notes will also help to set a quasi-sovereign benchmark for Hong Kong to further promote the development of the regional bond market. Great care has been taken to design this Programme to provide a convenient, flexible and cost-efficient platform for the issuance of debt denominated in currencies such as the Hong Kong dollar, US dollar, euro and yen.
8. This Programme will be a key instrument for the Corporation to develop its business activities in the region. I would like to take this opportunity to thank HSBC and JP Morgan, the Joint Arrangers of the Programme, for their valuable advice and support to bring the Programme to the market. We are also grateful to other members of the Dealer Group, namely Barclays Capital, BNP Paribas, Citi, Deutsche Bank, Goldman Sachs, Nomura International, Standard Chartered Bank and UBS Investment Bank for their staunch support. I look forward to your active participation to arrange public and private issues under this Programme, and further promote Hong Kong as an international financial centre.
Thank you.
