Hong Kong airport operator’s retail bonds take off on first day of sales, HSBC and BOCHK say

Number of first-day applications ‘reflects strong demand for safe investment options with a predictable income stream’, HSBC spokesman says

AAHK bonds’ interest payment is lower than the 4.75 per cent offered by the government’s green bonds, but are still ‘priced attractively’: BOCHK executive

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A Cathay Pacific airplane takes off at the Hong Kong International Airport. HSBC, BOCHK and other banks and brokers have offered a wide range of fee waivers for the AAHK bonds, which has also helped to boost sales. Photo: Yik Yeung-man

Published: 7:10pm, 17 Jan 2024Updated: 7:50pm, 17 Jan 2024

Airport Authority Hong Kong’s (AAHK) highly anticipated HK$5 billion (US$640 million) retail bonds attracted a huge response when subscriptions opened on Wednesday, banks and brokers said.

In fact, demand for the notes matched the popularity of the Hong Kong government’s green bonds issued in September last year, according to HSBC, Hong Kong’s biggest bank and a co-arranger of the deal.

“Compared to the retail green bond issuance by the Hong Kong government last year, we received a similar volume of customer applications on the first day of subscriptions for the retail bond issued by the Airport Authority,” an HSBC spokesman said. The government’s HK$20 billion retail green bonds attracted 321,018 subscriptions, which raised the final subscription amount to HK$30 billion, according to government data.

“This reflects strong demand for safe investment options with a predictable income stream.”

AAHK’s 4.25 per cent, two-and-a-half-year notes will pay interest quarterly. Investors with as little as HK$10,000 can subscribe to the bonds from January 17 to 25. They can also request early redemption, which will allow them to get their entire principal as well as the interest due on the redemption date.

The bonds’ interest payment is lower than the 4.75 per cent offered by the government’s green bonds.