LCQ12: Silver Bond issued in 2026
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Question:
Hong Kong's First Five-Year Plan emphasises "promoting the enhancement and upgrading of the pension finance system and continuing to diversify pension finance product offerings". Both the number of valid applicants and the total principal amount of subscription of the Silver Bond issued in 2026 have reached historic highs. In this connection, will the Government inform this Council:
(1) as it is learnt that the Silver Bond issued in 2026 recorded over 476 000 valid applications with subscription amount close to $120 billion, which is more than double the final issuance amount of $55 billion, whether the Government will, based on the eligible elderly population and subscription situations over the years, regularly review and increase the final issuance amount of Silver Bond, so as to further promote the silver economy; if so, of the details; if not, the reasons for that;
(2) as it is learnt that under the allocation mechanism of the Silver Bond issued in 2026, the maximum allocation of bonds per person was capped at 13 units, which was far lower than the maximum of 17 units allocated for the Silver Bond in 2025; as a result, over 388 000 applications seeking more than 12 units were only allocated 12 units initially, with the additional unit to be determined by ballot, the success rate of which was only about one in four, whether the Government will study increasing the per capita allocation of Silver Bond (such as increasing the basic guaranteed number of units to be allocated), and evaluate the role of Silver Bond in providing retirement income protection for the elderly; if so, of the details; if not, the reasons for that; and
(3) as it is learnt that Silver Bond holders may redeem their bonds early if they have financial needs, whether the Government has compiled statistics on the respective numbers of redemption cases and the amounts involved throughout the years since the issuance of Silver Bond in the 2016-2017 financial year, and whether it will review the redemption arrangements with reference to the relevant data, so as to enhance the flexibility of Silver Bond in the financial management of the elderly?
Reply:
President,
The Government set up the Government Sustainable Bond Programme (GSBP) and the Infrastructure Bond Programme (IBP) in 2018 and 2024 respectively, with the aim of utilising market resources to meet the funding needs of sustainable projects and public works projects which are conducive to long-term development of Hong Kong, pushing ahead Hong Kong's infrastructure and urban development, and facilitating the early completion of projects for the good of the economy and people's livelihood.
As the Government accelerates the development of the Northern Metropolis and other public works projects relating to the economy and people's livelihood, the total borrowing ceiling of the GSBP and the IBP was raised to HK$900 billion following approval by the Legislative Council in May this year. During 2026-27 to 2030-31, the Government plans to issue about HK$160 billion to $220 billion worth of bonds each year under the two bond programmes. Silver Bond is offered under the IBP (Note).
Note: Silver bond was first launched in 2016. During 2016 to 2023, it was offered under the Government Bond Programme (GBP); since 2024, it was offered under the IBP. The GBP was a Government initiative to develop the local bond market. In February 2024, the Government announced that the IBP and the GSBP would gradually replace the GBP.
In response to the question raised by Hon Maggie Chan, having consulted the Hong Kong Monetary Authority, our reply is as follows:
(1) and (2) Currently, the Government issues Silver Bond mainly for raising funds for capital works projects, while at the same time providing senior citizens with a reliable investment option with steady returns. The target issuance amount of the 2026 Silver Bond was HK$50 billion. In view of the positive response in subscription, the final issuance amount was increased to HK$55 billion.
When formulating specific arrangements of the bond issuance plan each year, the Government will take into consideration a basket of factors, including interest rates and tenors of different currencies and types of bonds, issuance costs of the Government, market response, fiscal position of the Government and duration and progress of works. The above factors are also applicable to the formulation of issuance arrangements of Silver Bond. The population of senior citizens and historical subscription results are some of the reference information when considering the issuance arrangements of Silver Bond, but not the decisive factors regarding the issuance amount.
Apart from Silver Bond, the Government has various measures on promoting silver economy. Among them, the Financial Services and the Treasury Bureau is taking the lead to promote the "silver financial and security arrangements", to assist senior citizens in prudent financial planning and risk management through arrangements such as retirement financial planning products, mortgage and investor education. Silver Bond provides senior citizens with a reliable investment option with steady returns, but is not for retirement income protection. Since the financial situation and investment plans vary significantly among individual senior citizens, we are not able to make an assessment in this regard.
On the "maximum principal allocation amount" of Silver Bond, as the Government aims at allowing more citizens to join the scheme, the allocation mechanism in the Issue Circular of the 2026 Silver Bond specified that the maximum allocation amount per investor is HK$1 million, viz each investor would be allocated 100 units at most. Under the current mechanism via allocation cycles, the highest number of allocated units for each Silver Bond issuance is determined subject to the total number of valid applications and amounts applied for. Using the Silver Bond issued in 2026 as an example, all valid applications received have been allocated bonds up to a maximum of 13 units. For the 88 422 applications seeking 12 or fewer units, they will be allocated the full amounts applied for. The remaining 388 281 applications applying for more than 12 units would be allocated 12 units each and then entered into a ballot. Of these applications, 97 396 applications would be allocated one additional unit.
The current allocation mechanism can cover all valid applications while satisfying the demand of small-lot investors. The Government will continue to take into account of the market response of Silver Bond when formulating suitable bond issuance arrangements in the future.
(3) An early redemption arrangement has been in place since the launch of Silver Bond in 2016. Currently, a bondholder can submit an early redemption request to the Government through a Placing Bank or Designated Securities Broker on any business day. The bonds will be redeemed at par by the Placing Bank or Designated Securities Broker on the third business day after the submission of the request. The amount equals to the principal amount together with accrued but unpaid interest (for the period up to (but excluding) the Early Redemption Settlement Date), which is calculated at the fixed rate applicable to the respective batches of bonds.
The amount involved in the early redemption of Silver Bond during the past 10 years (up to September 2026) is set out below. The Government does not keep records of the number of early redemption cases.
| Year of issuance | Early Redemption Amount (HK$'billion) |
Early Redemption Ratio (%) |
| 2025 | 7.0 | 1.3 |
| 2024 | 12.2 | 2.2 |
| 2023 | 18.2 | 3.3 |
| 2022 | 30.5 | 6.8 |
| 2021 | 31.6 | 10.5 |
| 2020 | 15.4 | 10.3 |
| 2019 | 1.0 | 3.4 |
| 2018 | 1.0 | 3.4 |
| 2017 | 1.4 | 4.7 |
| 2016 | 1.5 | 5.1 |
The early redemption ratio of Silver Bond during the aforementioned period is on average around 5 per cent of the issuance amount. This shows that the majority of senior citizens held/are holding their bonds until maturity and also reflects that Silver Bond and its issuance arrangements are supported by senior citizens. The current early redemption arrangements render Silver Bond both a safe and flexible investment option, offering senior citizens considerable liquidity in investment.
Ends/Wednesday, October 14, 2026
Issued at HKT 14:27
Issued at HKT 14:27
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