Hong Kong’s airport authority raises US$2.4 billion from historic bond issuance
AAHK’s bond was targeted at institutional investors and denominated in Hong Kong dollars
Airport Authority Hong Kong (AAHK) raised HK$18.5 billion (US$2.4 billion) from the largest-ever institutional bond denominated in Hong Kong dollars, joining a cohort of borrowers who are tapping the market amid slower-than-expected interest rate reductions.
The latest offering had four tranches with three-year, five-year, 10-year and 30-year notes that were respectively priced at 4.05 per cent, 4.10 per cent, 4.25 per cent and 4.50 per cent. The order book reached HK$25.3 billion thanks to demand from Asian investors, including banks, asset managers, insurers, other companies and private banks. The airport authority has a AA+ rating from S&P Global Ratings.
The airport authority also priced 10-year and 30-year offshore yuan bonds. The “dim sum bonds” totalled 3.2 billion yuan (US$436 million) after receiving bids reaching 5.7 billion yuan from investors in Asia, Europe, the Middle East and Africa. In addition, the airport operator was building a book for its US dollar bonds on Wednesday.
Proceeds from the HK$18.5 billion issuance will be used for refinancing and funding capital expenditures, including the airport’s three-runway system, and general corporate purposes.