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Hong Kong unveils details of Pilot Bond Grant Scheme for first-time issuers

As part of the implementation of the Hong Kong government’s plans to promote bond issuances in Hong Kong and to enhance Hong Kong’s competitiveness in the international bond market, the Hong Kong Monetary Authority (HKMA) announced on 10 May 2018 further details of the three-year Pilot Bond Grant Scheme (Scheme) as promulgated in the 2018-19 Budget, being one of the initiatives to attract local, Mainland and overseas enterprises to issue bonds in Hong Kong.

The key details of the Scheme are summarised below:

1. What types of issuers are eligible for the Scheme?

Eligible issuers must be “first time” issuers, which means issuers that have not issued bonds in Hong Kong in the five-year period between 10 May 2013 and 9 May 2018. It should be noted that the term “issuer” includes the entity issuing a bond and its associates which covers the entity’s subsidiary, parent company or fellow subsidiary under the common control of the same company. 

2. What are the criteria of eligible bond issues?

Eligible issues must:

  • be issued in Hong Kong – which means a majority of arranging activities of the bond issuance (i.e., originating and structuring, legal and transaction documentation preparation, and sale and distribution) takes place in Hong Kong;
  • have an issuance size of ≥ HK$1.5 billion (or the equivalent in foreign currency);
  • be lodged with and cleared by the Central Moneymarkets Unit (CMU) or listed on The Stock Exchange of Hong Kong Limited (SEHK)
  • be, at issuance, issued in Hong Kong to (i) 10 or more persons or (ii) less than 10 persons none of whom is an associate of the issuer.

3. How much is the grant amount? 

The grant amount for each bond issue (up to two bond issues per issuer) is equivalent to half of the eligible issuance expenses, up to the following limits:

  • HK$2.5 million – where the bond, its issuer or its guarantor(s) possess a credit rating by Fitch, Moody’s, Rating and Investment Information or Standard and Poor’s; or
  • HK$1.25 million – where none of the bond, its issuer or its guarantor(s) possess a credit rating by any of the above rating agencies.

4. What kinds of expenses are eligible to be covered by the grant amount?

The following expenses are eligible issuance expenses:

  • fees to Hong Kong-based arrangers;
  • fees to Hong Kong-based legal advisors;
  • fees to Hong Kong-based auditors and accountants;
  • fees to Hong Kong-based rating agencies;
  • (in the case of green bonds) fees to Hong Kong-based external green reviewers;
  • SEHK listing fees; and
  • CMU lodging and clearing fees.

Expenses covered by another grant scheme(s) in Hong Kong or overseas are ineligible.

5. When will the Scheme commence? How and when to apply?

The Scheme will be valid for a period of three years. The commencement date of the Scheme will be announced in due course.

Issuers and lead arrangers may request for application forms for the Scheme from the HKMA via and provide relevant supporting documents within 3 months after a bond’s issue date.

6. What are the key differences between the Scheme and the Asian Bond Grant Scheme in Singapore?

The Monetary Authority of Singapore implemented on 9 January 2017 the Asian Bond Grant Scheme (Singapore Scheme) to promote bond issuances in Singapore.

Below is a brief comparison of the two schemes:


The Singapore Scheme

The Scheme

Eligible issuers

The issuer must be a first time Asian company (with global headquarters in Asia) or non-bank financial institution

No requirement on the location of the headquarters of the issuer; the Scheme also applies to an issuer which is a bank

Grant per issuer

One time only

Up to 2 bond issues


Only applicable to issues with a tenor of at least 3 years

No tenor requirement


The bonds must be denominated in an Asian local currency or USD, EUR or JPY

No currency requirement

Minimum issue size

S$200 million (or its equivalent)

HK$1.5billion (or its equivalent)

Upper grant limit

  • S$400,000 for qualifying issuances that are rated by Fitch, Moody’s or Standard and Poor’s
  • S$200,000 for unrated issues
  • HK$2.5 million where the bond, its issuer or its guarantor(s) is rated by Fitch, Moody’s, Rating and Investment Information or Standard and Poor’s
  • HK$1.25 million for unrated issues

Revenue from issue

More than half of the gross revenue from arranging the issue is attributable to the “Financial Sector Incentive” companies in Singapore

No similar requirement



The launch of the Scheme is certainly welcomed by market participants and is expected to attract more companies to raise capital through bond issuances in Hong Kong, thereby boosting the local bond market and further enhancing Hong Kong’s position as an international financial centre.

If you want to know more about the Scheme or bond issuances in Hong Kong generally, please contact our debt capital markets partner, Kevin Tong.

Key Contacts

Kevin Tong

Partner | Corporate Finance

Email or call +852 2825 9229

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