Airport Authority retail bonds to be oversubscribed, BOCHK says, but HSBC reports only ‘favourable’ demand
- Bank of China (Hong Kong) expects bonds to be two times’ oversubscribed
- Higher return offered by government green bonds in September made them ‘more attractive to investors’: Everbright Securities International
Airport Authority Hong Kong’s (AAHK’s) HK$5 billion (US$640 million) retail bonds are expected to be oversubscribed, but have not generated as much buzz as the green bonds the Hong Kong government issued in September, banks and brokers said.
Bank of China (Hong Kong) (BOCHK), a co-arranger of the deal, said it had received a strong response for the AAHK notes, which it expected to be oversubscribed two times.
“BOCHK received the highest subscription numbers among all distributing firms, with every customer subscribing to HK$90,000 [worth of bonds] on average,” said Arnold Chow, deputy general manager of the personal digital banking product department at BOCHK. The bonds were priced attractively, as the market widely expects interest rates will fall this year, he added.
AAHK’s 4.25 per cent, two-and-a-half-year notes will pay interest quarterly. Investors with as little as HK$10,000 could subscribe to the bonds between January 17 and Thursday through banks and brokers. The bonds will start trading on the stock exchange on February 6, a day after their issuance.
However, HSBC – Hong Kong’s biggest bank and another co-arranger of the deal – said on Thursday that demand for the notes was only “favourable”. Last week, a spokesman said the lender had received a “similar volume” of customer applications for the Airport Authority notes on the first day of subscriptions as the green bonds.
“We have seen a favourable reception for the Airport Authority’s retail bond sale,” said Sami Abouzahr, head of investments and wealth solutions in the wealth and personal banking division at HSBC Hong Kong.
