Media Centre

Airport Authority Hong Kong Prices US$4.0 Billion Multi-Tranche Regulation S/Rule 144A Senior Notes Offering with Debut Green Tranche

2022/01/06

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, OR IN ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW.

 

(HONG KONG, 6 January 2022, 1230hrs) – Airport Authority Hong Kong (AAHK) announces that it has successfully priced a US$4.0 billion multi-tranche senior notes offering (the Notes) in Reg S / Rule 144A format. The multi-tranche offering comprises of:

  • US$1.0 billion 1.750% senior green notes due 2027 (the 5-year green tranche)
  • US$1.2 billion 2.500% senior notes due 2032 (the 10-year tranche)
  • US$1.2 billion 3.250% senior notes due 2052 (the 30-year tranche)
  • US$600 million 3.500% senior notes due 2062 (the 40-year tranche).

AAHK has successfully set a number of new records on this landmark transaction. This transaction marks the largest US dollar bond offering in size of a Hong Kong issuer since 2003 and the 40-year tranche is the longest tenor benchmark US dollar bond offering of a Hong Kong issuer. The Notes were oversubscribed by multi-times which enabled AAHK to price the Notes well below the initial price guidance.

The Notes were well-received by a diverse group of both conventional and green investors with the 5-year green tranche receiving encouraging demand from global green investors which accounted for 59.4% of final allocation.

More than 200 professional and institutional investors including sovereign wealth funds, asset managers, corporations, banks and insurance companies across Asia, Europe and the United States participated in the transaction.

The 5-year green tranche marks AAHK’s inaugural green bond issuance and builds on the recent momentum in the sustainable finance capital markets. This demonstrates AAHK’s commitment to making Hong Kong International Airport (HKIA) one of the world’s greenest airports, and support to HKSAR Government’s policy to promote the development of sustainable finance and to develop Hong Kong as an international sustainable finance hub.

Jack So, Chairman of AAHK said, “We are very pleased with the overwhelming responses from investors around the world, making this bond offering the largest US dollar bond issuance from a Hong Kong issuer since 2003. The successful launch of the 40-year tranche is a solid testament to the support for HKIA’s long-term development as well as the solid credit profile of AAHK.”

The proceeds from the 10-year, 30-year and 40-year tranche will be used to fund AAHK's capital expenditure including the capital expenditure of the Three-runway System project (3RS) and for general corporate purposes. Meanwhile, the proceeds from the 5-year green tranche will be used to fund financing or refinancing, in full or in part of the eligible projects undertaken under the Airport Authority Sustainable Finance Framework (the “Framework”). The issuance and use of proceeds of the 5-year green tranche and eligible projects are governed by the Framework established in November 2021, with a second party opinion provided by Sustainalytics. The 5-year green tranche has also received the Green Finance Certificate (pre-issuance stage) from the Hong Kong Quality Assurance Agency. Details of the Framework can be found at https://www.hongkongairport.com/en/sustainability/sustainable-finance.page

The Notes are expected to be issued on 12 January 2022, subject to the satisfaction of certain conditions precedent and are expected to be listed on The Stock Exchange of Hong Kong Limited.

The Notes are expected to be rated “AA+” by S&P.

The Joint Global Coordinators and Joint Bookrunners are BofA Securities, BNP Paribas, HSBC, J.P. Morgan, Standard Chartered Bank and UBS; and Joint Bookrunners are ANZ, Barclays, Bank of China, Citigroup, Credit Suisse, Mizuho Securities and Morgan Stanley. BofA Securities, BNP Paribas, HSBC and UBS also acted as the Joint Green Structuring Advisors.

 

Summary of investors responses and pricing of the Notes:

 

the 5-year green tranche

the 10-year tranche

the 30-year tranche

the 40-year tranche

Orderbook

Over US$3.3 billion

Over US$3.6 billion

Over US$2.8 billion

Over US$1.5 billion

Oversubscription rate

3.3x

3.0x

2.3x

2.5x

Priced at

5-year UST+42.5 basis points

10-year UST+80  basis points

30-year UST+120 basis points

30-year UST+140 basis points

Yield of

1.854%

2.509%

3.300%

3.500%

Basis points below initial price guidance

 

37.5

30.0

25.0

30.0

Allocation % by regions

(Asia: Europe: US)

73%:11%:16%

 

59%:12%:28%

 

UST: US Treasury Rate

 

Important Notice

This release is not for distribution, directly or indirectly, in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia). This release does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933 (the “Securities Act”).

Such securities may not be offered or sold in the United States or to, or for the account or benefit of, US persons (as such term is defined in Regulation S under the Securities Act) except pursuant to an exemption from the registration requirements of the Securities Act. There will be no public offer of securities in the United States.

This communication is being distributed to and is only directed at: (i) persons who are outside the United Kingdom; or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (iii) high net worth entities falling within Articles 49(2)(a) to (d) of the Order and (iv) other persons to whom it may lawfully be communicated (all such persons in (i), (ii), (iii) and (iv) above together being referred to as “relevant persons”). Any invitation, offer or agreement to subscribe for, purchase or otherwise acquire securities will be engaged in only with relevant persons. Any person who is not a relevant person should not act or rely on this communication or any of its contents.

In any member state of the European Economic Area, this communication is only addressed to and is only directed at qualified investors in such member state within the meaning of the Prospectus Regulation EU 2017/1129 (the “Prospectus Regulation”), and no person that is not a qualified investor may act or rely on this communication or any of its contents. In the United Kingdom, this communication is only addressed to and is only directed at qualified investors within the meaning of the Prospectus Regulation as it forms part of domestic law by virtue of European Union (Withdrawal) Act 2018, and no person that is not a qualified investor may act or rely on this communication or any of its contents.

Media Enquiry Hotline:
+852 2188 7152
Contact Email:
media@hkairport.com
Airport Authority Website:
www.hongkongairport.com
Customer Enquiry Hotline:
+852 2181 8888