Hong Kong’s Airport Authority offers up to HK$5 billion of 4¼% bonds

By William Gullotti

Buffalo, N.Y., Jan. 5 – Airport Authority Hong Kong will conduct a retail offering of up to HK$5 billion of 4¼% bonds due Aug. 5, 2026 (AA+) at par, according to an announcement and an offering memorandum on Friday.

The bonds are non-callable; however, bondholders are entitled to put the bonds at par on any interest payment date starting March 6 or upon occurrence of a relevant event.

Bank of China (Hong Kong) Ltd. and HSBC Ltd. are the joint lead managers, also serving as placing banks alongside Bank of Communications (Hong Kong) Ltd., Bank of East Asia, Ltd., China Citic Bank International Ltd., China Construction Bank (Asia) Corp., Ltd., Chiyu Banking Corp., Ltd., Chong Hing Bank Ltd., Citibank (Hong Kong) Ltd., CMB Wing Lung Bank Ltd., Dah Sing Bank, Ltd., DBS Bank (Hong Kong) Ltd., Fubon Bank (Hong Kong) Ltd., Hang Seng Bank Ltd., Industrial and Commercial Bank of China (Asia) Ltd., Nanyang Commercial Bank, Ltd., OCBC Bank (Hong Kong) Ltd., Shanghai Commercial Bank Ltd. and Standard Chartered Bank (Hong Kong) Ltd.

Bright Smart Securities International (H.K.) Ltd., Chief Securities Ltd., Essence International Securities (Hong Kong) Ltd., Everbright Securities Investment Services (HK) Ltd., First Shanghai Securities Ltd., Futu Securities International (Hong Kong) Ltd., Hong Kong International Securities Ltd., Sanfull Securities Ltd., Sinolink Securities (Hong Kong) Co., Ltd., SinoPac Securities (Asia) Ltd., SoFi Securities (Hong Kong) Ltd., South China Securities Ltd., Tai Shing Stock Investment Co., Ltd., Tai Tak Securities (Asia) Ltd., Tiger Brokers (HK) Global Ltd., UOB Kay Hian (Hong Kong) Ltd., Victory Securities Co. Ltd. and Wocom Securities Ltd. are the designated securities brokers for the offering.

Bank of China (Hong Kong) Trustees Ltd. is the trustee.

Linklaters is advising the issuer, with Deacons advising the lead managers.

The offering period opens at 8 p.m. ET on Jan. 17.

Although the offering period is scheduled to expire on Jan. 25 at 1 a.m. ET, the issuer may shorten the offering period at its discretion and without prior notice.

Settlement is expected to occur Feb. 5.

Listing for the bonds is expected on the Hong Kong Exchange effective Feb. 6. The ISIN is HK0000979754.

Proceeds will be used to fund capital expenditures, including its 3RS Project, and for general corporate purposes.

According to S&P Global Ratings, “We rate the proposed senior unsecured notes the same as our issuer rating on AAHK because the authority's capital structure has minimal structural or contractual subordination risk. As of Sept. 30, 2023, AAHK had total debt of about HK$115 billion issued at the parent level. It has neither secured nor priority debt currently, so does not meet our notching-down threshold for subordination risk; we notch down when the ratio of priority debt (or secured debt) to total debt is above 50%.”

The issuer is a statutory body corporate established in Hong Kong under the Airport Authority Ordinance.

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