Hong Kong airport’s US$1.5 billion bond oversold by 10 times as investors clamour to bet on post Covid-19 travel recovery
- Perpetual securities diversify funding during pandemic without diluting government equity ownership
- Investors’ demand for the highly rated debt issue peaked at over US$15 billion
Airport Authority Hong Kong (AAHK), the operator of the city’s airport, said on Wednesday that it has raised US$1.5 billion by selling perpetual debt to help fund the completion of its mega third-runway project.
Investors from sovereign wealth funds to insurance companies clamoured to participate in the sale and the deal’s order book peaked at over US$15 billion. In the end, 280 investors across Asia and Europe took part in the transaction, driven by the belief that the pandemic is a temporary event and that Hong Kong is well-placed as a hub within the Greater Bay Area to benefit from the eventual rebound in travel.
“We are very pleased with the overwhelming response from the global investor community, which is a testimony to the market’s confidence in Hong Kong International Airport’s business recovery when the pandemic subsides,” said Jack So Chak-kwong, AAHK’s chairman in a statement.
Hong Kong’s government owns AAHK, bolstering investors’ confidence that if AAHK were to struggle to sustain interest payments it would likely be bailed out. The AAHK plays a key role in maintaining Hong Kong as an aviation hub.
