HSBC, Standard Chartered, Bank of China among lenders waiving fees for Hong Kong airport operator’s US$640 million retail bond
- Banks such as HSBC are waiving off many types of charges, including subscription, safe custody and transaction fees
- Investors are shifting their attention to the high-quality bond offering from the airport operator amid a quiet IPO market, Hong Kong Securities Association chair says
Banks and brokers are waiving a range of fees for retail investors eyeing Airport Authority Hong Kong (AAHK)’s highly anticipated HK$5 billion (US$640 million) bond, which opens for subscription on Wednesday.
HSBC, Hong Kong’s biggest bank, plans to waive eight types of charges for the airport operator’s bond, including subscription fees, safe custody fees and other transaction costs, to support retail investors subscribing to the offering from January 17 to 25.
“Given anticipation that interest rates are at a peak, it makes sense for retail investors to lock down such a rate from a high-quality name for 2.5 years,” said Eugene Ng, managing director of debt capital markets and investment banking at HSBC Asia Pacific. “The bond is expected to be well-received.”
The 4.25 per cent, 2.5-year note will pay interest quarterly. Investors can request early redemption from the AAHK, allowing them to get their entire principal plus interest due on the date of redemption.
This is AAHK’s first retail bond offering targeted at the general public in 20 years to fund its third runway, which will allow the Hong Kong airport to handle an extra 30 million passengers each year and strengthen its status as an international aviation hub.