Hong Kong airport authority’s US$640 million retail bonds to fund new runway prove popular with investors in boost for city’s aviation hub ambitions

The 4.25 per cent, 2.5-year bonds were oversubscribed more than three times, totalling HK$15.69 billion (US$2 billion) from 175,178 applications

‘The bonds have been allocated in accordance with the mechanism set out in the offering memorandum,’ Airport Authority says

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A Cathay Pacific aircraft takes off from Hong Kong International Airport. Photo: Yik Yeung-man

Published: 5:42pm, 1 Feb 2024Updated: 7:20pm, 1 Feb 2024

Airport Authority Hong Kong’s (AAHK) HK$5 billion (US$640 million) retail bonds, the first for the general public by the city’s airport operator in 20 years, received overwhelming response from investors.

The 4.25 per cent, 2.5-year bonds were oversubscribed more than three times, logging HK$15.69 billion from 175,178 applications. The Hong Kong government’s 4.75 per cent, three-year green bonds last September attracted a record 321,018 subscriptions totalling HK$30 billion, exceeding the HK$20 billion issue size.

“The bonds have been allocated in accordance with the mechanism set out in the offering memorandum,” the Airport Authority said in a statement. “The valid applications received have been allocated different amounts of bonds up to a maximum of three trading lots for each valid application.”

Applications for up to two lots will get their entire allocation, the authority said.

The new north runway of Hong Kong International Airport. Photo: Handout

The bonds represent the last leg of financing for the third runway at Hong Kong’s airport. The new runway will allow the airport to handle an extra 30 million passengers each year and strengthen its status as a leading aviation hub.

The final tally of AAHK’s retail bonds was announced hours after Hong Kong’s de facto central bank kept the key interest rate unchanged in the first monetary policy decision of 2024.