To make provisions for the raising of loans in Hong Kong by the issue of bonds and for matters connected therewith.
[1 August 1975]
(Format changes—E.R. 5 of 2021)
This Ordinance may be cited as the Loans (Government Bonds) Ordinance.
In this Ordinance, unless the context otherwise requires—
Government bond (政府債券) means a bond issued by the Government under this Ordinance; loan (借款) means a loan raised by the issue of Government bonds.The Government may, by the issue of bearer bonds, raise in Hong Kong such loans for such purposes as may be approved by resolution of the Legislative Council.
Except in the case of a loan raised for the purposes of the general revenue, a loan shall be applied and is appropriated to the purposes for which it is raised:Provided that any part of a loan which cannot be applied to those purposes may be applied to such other purposes as may be approved by the Financial Secretary.
Where expenditure must be incurred in respect of any purpose for which a loan is being raised prior to the raising of the loan, such expenditure shall be charged as an advance pending reimbursement from such loan and the maximum amount which may be so advanced in any financial year in connexion with that purpose shall be approved by resolution of the Legislative Council.
Loans and all interest and other charges thereon are charged on and shall be payable out of the general revenue and assets of Hong Kong.
Any expenses of or incidental to the raising of a loan may be defrayed from that loan.
Subject to subsection (2), Government bonds shall—
bear interest at such rate;
be issued at such price and in such denominations; and
be issued for such periods and subject to such terms,
as the Chief Executive may determine. (Amended 68 of 1999 s. 3)
The period for which any Government bonds are issued may be extended for such further period as the Financial Secretary and the holders thereof may agree and during that further period shall bear interest at such rate as may be so agreed.
Government bonds and interest coupons relating thereto shall be transferable by delivery.
The Government may create a sinking fund for—
the payment of expenses of, or incidental to, the redemption of an issue of Government bonds; and
the redemption of an issue of Government bonds.
Subject to sections 7 and 8, where a sinking fund is created under subsection (1) the Government shall pay into that fund such sums at such times as may be specified in the prospectus relating to that issue of Government bonds.
All payments into the sinking fund under subsection (2) shall be appropriated out of the general revenue and assets of Hong Kong.
Pending the application of the sinking fund for the purposes specified in subsection (1), the moneys in that fund shall be placed at interest or invested in such securities as the Financial Secretary may determine.
Any securities purchased under subsection (4) may be sold by the Director of Accounting Services with the prior approval of the Financial Secretary. (Amended L.N. 16 of 1977; L.N. 453 of 1993)
Where the Financial Secretary is satisfied that the value of a sinking fund is sufficient with further accumulations of interest, but without further payments under section 6(2), to redeem the issue of Government bonds in respect of which it was created not later than the final redemption date thereof, he may suspend further payments under section 6(2) to that fund.
The Financial Secretary may recommence such payments at any time if he thinks fit.
Subject to the approval of the Financial Secretary, the Director of Accounting Services may at any time apply the whole or part of a sinking fund, or any appropriation made under section 6(3), for the purpose of redeeming or purchasing Government bonds in respect of which such fund or appropriation was created or made, as the case may be, at a price not exceeding the nominal value of such bonds.
Any Government bond redeemed or purchased shall be surrendered to the Director of Accounting Services for cancellation.
(Amended L.N. 16 of 1977; L.N. 453 of 1993)
No stamp duty shall be payable in respect of Government bonds.
The Financial Secretary may, with the consent of the holder of any bond issued under the Hong Kong (Rehabilitation) Loan Ordinance*, exchange such bond for Government bonds on such terms and conditions as may be agreed.
Subject to section 5, the Financial Secretary may—
determine the form of Government bonds;
arrange for the issue in the first instance of provisional certificates, which may be exchanged for Government bonds;
determine the days for payment of interest;
arrange for the issue of coupons for the payment of interest;
arrange for the replacement of defaced, lost or destroyed Government bonds or interest coupons;
determine the manner of payment of interest and redemption moneys.