HONG KONG (Reuters) – Hong Kong’s major airport operator aims to raise up to $ 1.5 billion through the issuance of bonds to help fund the construction of a third runway, two sources told direct knowledge of the matter.
Calls began by investors on Wednesday for the Hong Kong Airport Authority’s deal made up of 10-year and 30-year U.S. dollar denominated securities, a term page showed.
Sources said the airport operator was likely to raise between $ 1 billion and $ 1.5 billion, with the final amount due this week.
The sources declined to be identified as the information has not yet been made public. The Hong Kong Airport Authority did not immediately respond to a request for comment.
The deal is the third air-related debt trade since the beginning of 2021 after Singapore Airline raised $ 500 million and Bank of China Aviation completed a $ 400 million handout.
The airport bands are expected to be AA + rated by S&P, the term page showed.
Construction of the third runway is expected to be completed in 2022 and should be operational by 2024, according to the airport’s website. They said the project should cost HK $ 141.5 billion ($ 18.3 billion).
Travel through Hong Kong airport has declined with the coronavirus pandemic with an 87.7% fall in passenger numbers by 2020, while flights rose 18.3%.
The Hong Kong government ended the issuance of $ 2.5 billion green bonds on Wednesday, a statement from the city’s monetary authority said.
Reciting with Kane Wu and Scott Murdoch; Edited by Edwina Gibbs