Hong Kong’s airport authority to launch US$640 million retail bond, its first in 20 years, to finance third runway
- The 4.25 per cent retail bond, with a tenor of 2.5 years, will make interest payments every three months
- Hong Kong residents will be able to subscribe in HK$10,000 increments at select banks and securities brokers from January 17 to 25
Airport Authority Hong Kong (AAHK) will raise up to HK$5 billion (US$640 million) from a retail bond this month, its first offering to the general public in 20 years, to fund its third runway and other operations, the airport operator said on Friday.
The offering comes after the authority raised HK$4 billion earlier this week from a 3.5-year bond sale to institutional investors.
This is only the third time the airport authority has issued retail bonds following issuances in 2002 and 2003.
“We want to issue the retail bonds to give Hong Kong residents a chance to participate in the third runway project,” Julian Lee, executive director of finance at AAHK, said at a media briefing on Friday.
The third runway will allow the Hong Kong airport to handle an extra 30 million passengers each year, which will strengthen its status as an aviation hub. When the airport authority announced a finance plan in 2016, the government decided not to use tax payers’ money so that it would not need the approval of the city’s Legislative Council.
Instead, the AAHK added charges for airlines and introduced a levy of HK$180 each to be paid by departing passengers. It also decided to use its own savings, bank loans and bond issuances to finance the mega project.