Hong Kong airport raises more than US$500 million in first local-currency bond offering, to fund third runway
- The debut Hong Kong dollar offering will fund capital expenditures including the third runway at Hong Kong International Airport
- Both AAHK and the deal participants believe the issuance can further foster the development of the city’s local bond markets
Airport Authority Hong Kong (AAHK), the operator of the city’s airport, has tapped the local public institutional bond market for the first time, pricing a HK$4 billion (US$512 million) senior offering to fund capital improvements including its third-runway project.
Investors from sovereign wealth funds, asset managers, corporations, banks and insurance companies poured into the sale, and the deal’s order book topped HK$11 billion from 57 accounts, AAHK said on Wednesday.
The coupon for the bond was set at 3.83 per cent, compared with the initial price guidance given to potential investors of 4.2 per cent, according to AAHK’s announcement.
“The overwhelming response from international investors to this landmark HKD deal, with an oversubscription rate of 2.75 times, has demonstrated the international market’s confidence in not only the AAHK and its business outlook, but also the HKD and the HKD capital market,” David Yim, head of capital markets for Greater China and North Asia at Standard Chartered, one of the coordinators of the issuance, said in a statement.