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Hong Kong to issue US$640m bonds for construction of third runway
THE Hong Kong Airport Authority (AAHK) announced that it plans to launch three-year bonds worth up to HKD5 billion (US$640 million) to the public next year, as part of its plans to raise HKD141.5 billion required for the construction of the third runway at Chek Lap Kok.
The announcement was made after the AAHK released a consultancy report by HSBC on the detailed funding study for the third runway system. The report analysed different debt structures and identified suitable financial instruments.
"A retail bond offering towards the start of the AAHK's funding timetable will facilitate public engagement in the project from an early stage. As there has not been any non-HKG retail bond issuance in recent years, HSBC would recommend targeting a more conservatively sized offering, such as HKD5 billion and 3 years tenor.
"HSBC also recommends AAHK to take into account HKG's retail bond offering programme to ensure that both timing and terms are appropriate and optimised," the bank report said.
One-third of the total cost will be financed by the authority's operating surplus, while about 20 per cent will come from an airport construction surchage paid by passengers. The rest, about HKD69 billion will be raised through bonds and loans.
HKAA's CEO, Fred Lam said the HKD5 billion worth of bonds are issued "in accordance to the wishes of the people", as part of efforts to enhance public engagement in the multi-billion project. He said it's too early to decide on the pricing of the bonds, which will be offered in the third quarter of next year, according to media reports.
The announcement was made after the AAHK released a consultancy report by HSBC on the detailed funding study for the third runway system. The report analysed different debt structures and identified suitable financial instruments.
"A retail bond offering towards the start of the AAHK's funding timetable will facilitate public engagement in the project from an early stage. As there has not been any non-HKG retail bond issuance in recent years, HSBC would recommend targeting a more conservatively sized offering, such as HKD5 billion and 3 years tenor.
"HSBC also recommends AAHK to take into account HKG's retail bond offering programme to ensure that both timing and terms are appropriate and optimised," the bank report said.
One-third of the total cost will be financed by the authority's operating surplus, while about 20 per cent will come from an airport construction surchage paid by passengers. The rest, about HKD69 billion will be raised through bonds and loans.
HKAA's CEO, Fred Lam said the HKD5 billion worth of bonds are issued "in accordance to the wishes of the people", as part of efforts to enhance public engagement in the multi-billion project. He said it's too early to decide on the pricing of the bonds, which will be offered in the third quarter of next year, according to media reports.
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