![Hong Kong airport authority’s US$640 million retail bonds to fund new runway prove popular with investors in boost for city’s aviation hub ambitions](https://www.naphjas.com/wp-content/uploads/2024/02/d1b1c158-cbaa-4a6f-aa00-643291c442ea_af235b7e.jpg)
01 Feb Hong Kong airport authority’s US$640 million retail bonds to fund new runway prove popular with investors in boost for city’s aviation hub ambitions
Airport Authority Hong Kong’s (AAHK) HK$5 billion (US$640 million) retail bonds, the first for the general public by the city’s airport operator in 20 years, received overwhelming response from investors.
“The bonds have been allocated in accordance with the mechanism set out in the offering memorandum,” the Airport Authority said in a statement. “The valid applications received have been allocated different amounts of bonds up to a maximum of three trading lots for each valid application.”
Applications for up to two lots will get their entire allocation, the authority said.
![The new north runway of Hong Kong International Airport. Photo: Handout](https://cdn.i-scmp.com/sites/default/files/d8/images/canvas/2024/02/01/67914571-6765-413d-a781-2916fb5b3020_9eed0558.jpg)
The bonds represent the last leg of financing for the third runway at Hong Kong’s airport. The new runway will allow the airport to handle an extra 30 million passengers each year and strengthen its status as a leading aviation hub.
Considering interest rates are likely to fall at some point this year, the bonds from AAHK were priced attractively, analysts said.
The interest rate for the Airport Authority’s bonds are still attractive given the recent global trend of declining bond yields, said Kenny Ng, a securities strategist at Everbright Securities.
The subscription for the Airport Authority’s bonds could have been stronger had investors not already allocated some of their funds to the better-yielding government green bonds, Ng said.
China Citic Bank International said the subscriptions for the retail bonds were in line with expectations.
Standard Chartered Bank, ICBC Asia, CMB Wing Lung Bank and China Citic Bank International said previously that the response to the Airport Authority’s bonds was “satisfactory”.
The AAHK had appointed 10 banks to act as market makers for the bonds.
The bonds will pay interest quarterly. Investors with as little as HK$10,000 could subscribe to the bonds between January 17 and Thursday through banks and brokers. Subscribers have the added benefit of redeeming the notes before maturity, allowing them to get their principal and interest due on the date of redemption.
The bonds will start trading on the Hong Kong stock exchange on February 6.