Hong Kong's Airport Authority has successfully priced around $7 billion equivalent of multi-currency senior notes offering in Hong Kong dollars (HK$), offshore Renminbi (CNH) and US dollars ($).
The offering comprises: a HK$10.5 billion ($1.35 billion) 4.05% 3-year tranche; a HK$4.5 billion 4.1% 5-year tranche; a HK$2.1 billion 4.25% 10-year tranche; HK$1.4 billion 4.50% 30-year tranche; CNH2 billion ($270 million) 2.85% 10-year tranche; a CNH1.2 billion 3.40% 30-year tranche; a $1.3 billion 4.75% 3.5-year tranche; a $1.85 billion 4.875% 5.5-year tranche; and a $1 billion 5.125% 10-year tranche.
The HK$ notes and Rmb notes offering was priced on January 7; AHK then launched and priced the $ notes offering the next day, according to to a media release.
The HK$18.5 billion offering marks the largest ever HK$ public bond offering to-date, and the 30-year HK$ tranche is the longest ever public HK$ bond issued globally, according to the release.
Investors included sovereign wealth funds, asset managers, corporations, banks meaning an oversubscription rate of 3.7 times.
Accoridng to the Airport Authority, the net proceeds from the issues of the HK$ notes and $ notes to refinance existing indebtedness, to fund its capital expenditure, and for other "general corporate purposes". The net proceeds from the issue of the Rmb notes will mainly be used for capital injections and investment projects, in addition to general corporate purposes.
Fred Lam, chairman of the Airport Authority, said in the media release: “We are very pleased with the positive responses from investors around the world. By introducing a bond structure that accommodates multiple currencies, we aim to attract a diverse investor base while optimising our capital structure to support the continuous development of airport."
Lam added: "The HK$ offering will further support the development of the HK$ bond market and strengthening Hong Kong’s role as international financial center.”
The HK$ notes and CNH notes are expected to be issued on January 14 and the $ notes are expected to be issued on January 15, subject to the satisfaction of certain conditions, and are then expected to be listed on Hong Kong Stock Echange.
The joint global coordinators, joint bookrunners and joint lead managers for the HK$ notes were: Bank of China, BofA Securities, Crédit Agricole CIB, HSBC, JP Morgan, Standard Chartered and UBS. Joint bookrunners and joint lead managers for the HK$ notes were: ANZ, BNP Paribas, Citigroup, DBS and Mizuho.
The joint global coordinators, joint bookrunners and joint lead managers for the CNH notes were Bank of China, Crédit Agricole CIB, HSBC, Standard Chartered Bank and UBS. Joint bookrunners and joint lead managers for the CNH notes were Bank of Communications, BofA Securities, DBS Bank, Deutsche Bank, ICBC (Asia), JP Morgan and Mizuho.
The joint global coordinators, joint bookrunners and joint lead managers for the $ notes were BofA Securities, HSBC, JP Morgan, Standard Chartered Bank and UBS. Joint bookrunners and joint lead managers for the notes were ANZ, Bank of China, Citigroup, Crédit Agricole CIB, DBS, Deutsche Bank, Goldman Sachs and Morgan Stanley.
The financial advisor to the Airport Authority was Rothschild & Co.
David Yim, head of capital markets, Greater China & North Asia, Standard Chartered, said in a statement: “The HK$18.5 billion issuance marks the largest-ever institutional HK$ bonds and features the first-ever 30-year HK$ tenor, a pioneering move that further supports the development of the HK$ bond market."
Lim continued: "The successful completion of its debut HK$ institutional offering and a long-dated CNH offering last year has opened up more alternative and attractive funding channels to AAHK, laying the solid foundation for the record-breaking transaction this time.”
Yim added: “Over the past five years, the total issuance volume of HK$ bonds in the market rose by 55% to a record high of around HK$240 billion in 2024, indicating investors’ growing interest in the HK$ bonds. We believe the success of AAHK’s transactions will encourage more issuers from Hong Kong and elsewhere to explore alternative local currencies, while consolidating the status of Hong Kong as the international financial centre.”
