The following is issued on behalf of the Hong Kong Monetary Authority:
The Hong Kong Mortgage Corporation Limited (HKMC) announced today (October 30) the successful completion of its fourth infrastructure loan-backed securities (ILBS) issuance (Bauhinia 4). The issuance builds on the HKMC's aim of developing the ILBS asset class through regular issuances after three prior issuances between 2023 and 2025 through the Bauhinia brand name. These issuances offer professional investors exposure to a diversified portfolio of project and infrastructure debt across various geographies and sectors.
The Executive Director and Chief Executive Officer of the HKMC, Mr Colin Pou, said, "The issuance shows the HKMC's commitment to the infrastructure financing business and its support for Hong Kong's development into an infrastructure financing hub. The strong demand from new and existing investors on the issued notes demonstrates the market's growing recognition of the infrastructure asset class."
Both new and recurring investors displayed strong interest in the Bauhinia 4 issuance. The widespread investor base includes asset manager, corporate, family office, financial institution, hedge fund, insurer, pension fund, private banking, and security firm investors. There is also a rising appetite from bank investors across Asian countries.
Asian Infrastructure Investment Bank (AIIB) continued to participate in the HKMC's ILBS issuance as an anchor investor through its US$300 million investment programme. AIIB's investment programme continues to fulfil its objective to mobilise private capital into the infrastructure sector.
Bauhinia 4 has a portfolio of 42 infrastructure debt obligations across 32 individual projects spreading across 15 countries and 11 sub-sectors, with a total value of approximately US$481.5 million. A part of the assets of the Bauhinia 4 portfolio is from the redemption of Bauhinia 1, as Bauhinia 1 reached the end of its 3-year non-call period.
In total, five classes of notes are issued (Class A1-SU, Class A1, Class B, Class C and Class D), with aggregate principal of US$457.3 million. The issued notes are listed on The Hong Kong Stock Exchange. With ongoing interest and growing demand for the mezzanine tranche, the HKMC issued an unrated Class D, allowing the issuance to continue to maintain an efficient capital structure. The HKMC acts as the sponsor, collateral manager and risk retention holder of the transaction.
Sustainability continues to be an important theme of the Bauhinia issuances with an US$128.5 million sustainability tranche (Class A1-SU) backed by sustainable, green and social assets. Class A1-SU is issued in accordance with the HKMC's Social, Green and Sustainability Financing Framework, which aligns with the Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines released by the International Capital Market Association.
Standard Chartered Bank is the Sole Global Co-ordinator. BNP Paribas, China International Capital Corporation Hong Kong Securities Limited, ING Bank N.V., Singapore Branch, MUFG Securities Asia Limited, SMBC Nikko Securities (Hong Kong) Limited and Standard Chartered Bank are the Joint Bookrunners. Fubon Bank (Hong Kong) Limited and Haitong International Securities Group Limited are the Co-Managers.