Hong Kong International Airport has successfully raised $4 billion through a bond issue, with part of the proceeds earmarked for its planned three-runway system.

The fund raising was oversubscribed, allowing the pricing of the notes well below the initial price guidance, says the Airport Authority of Hong Kong (AAHK).

Hong Kong International Airport

Source: Wikimedia Commons

The departure hall of Hong Kong International Airport in April 2020.  The territories “zero-covid” strategy has crushed air traffic

“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,” says AAHK.

The bond issue comprises four tranches: $1 billion due in 2027 paying 1.75% annually; $1.2 billion due in 2032 paying 2.5%; $1.2 billion due in 2052 paying 3.25%; and $600 million due in 2062 paying $600 million.

In addition to funding the airport’s long planned third runway, the funds will also be used for general corporate purposes.

The authority adds that this is the biggest US dollar bond issue in Hong Kong since 2003.

The successful bond issue comes amid a collapse in air traffic in Hong Kong stemming from the government’s strict ‘zero-covid’ policy, which is aligned with Mainland China.

In November 2021, the airport handled just 120,000 passengers. While this was an improvement on the 81,000 passengers handled in November 2020, it was far below the 5.4 billion passengers handled in November 2019, before the coronavirus pandemic.

Aircraft movements in November 2021 were 5,980, far below the 26,000 recorded in November 2019.