The government on Tuesday announced the launch of a new batch of silver bonds, to support infrastructure projects.

The three-year bond programme, for residents aged 60 or above, will have a guaranteed interest rate of 4 percent, down from 5 percent last year. Interest will be paid every six months.

At a press briefing, Secretary for Financial Services and the Treasury Christopher Hui said he was confident that people will find the bonds appealing, despite the lower guaranteed returns.

"Many people in the market are expecting an interest rate reduction... We consider this offering interest rate appealing. Taking into account this is a three-year guaranteed return, that's why we are very confident that it's going to attract a lot of attention," he said.

Wong Tsz-cheuk, head of HSBC's Greater China FX Cash and EM Rates Trading, echoed Hui's views, saying he expects a good response.

"Many of the tenants are reflecting below three percent market yield. Therefore, we actually think this four percent is very attractive, given all the considerations about risk premium," he said.

The target issuance size is HK$50 billion, with a possibility of this being increased to HK$55 billion subject to market response. Each unit of bonds will be offered at HK$10,000, with each investor allocated 100 units at most.

People can subscribe from September 30 to October 14.

In a statement, Financial Secretary Paul Chan said this batch of silver bonds will be issued under the Infrastructure Bond Programme.

"This will support infrastructure projects for the good of the economy and people's livelihood, and provide our citizens with a 'sense of participation' and a 'sense of gain' in support of Hong Kong's long-term development projects," he said.

The proceeds of the bonds will be put into the Capital Works Reserve Fund for investment in infrastructure projects.