Blue-chips Cathay, MTR tap record-hot Hong Kong dollar bond market

[SYDNEY/HONG KONG] Two of Hong Kong’s biggest companies, transport operator MTR Corp and airline Cathay Pacific, are aiming to raise at least HK$17 billion (S$2.8 billion) through separate bond issues, according to sources, as demand for Hong Kong dollar funding hits a record year-to-date high.

LSEG data show Hong Kong dollar bond issuance reached HK$115.7 billion, as of Apr 21, up 16.4 per cent from a year earlier and the highest year-to-date total ever.

Full-year issuance climbed to a record HK$360.6 billion in 2025, up about 17 per cent from 2024 and also the highest annual total on record based on LSEG data.

MTR Corp is looking to raise at least HK$15 billion in a three-tranche bond issuance, according to two sources with direct knowledge of the matter, who added the deal size could be increased if there was sufficient demand. The bond issuance could reach HK$20 billion, one of the sources added.

The operator of Hong Kong’s popular subway system and land owner is planning to issue five-, 10- and 30-year green bonds, according to a term sheet seen by Reuters. There has been at least HK$60 billion worth of orders placed by investors for MTR Corp bonds, according to a book runners’ message seen by Reuters.

MTR Corp did not immediately respond to a request for comment from Reuters.

Cathay eyes HK$2 billion

Separately, Hong Kong carrier Cathay Pacific is aiming to raise about HK$2 billion through a one- or two-tranche fixed-rate Hong Kong dollar bond, according to two sources with direct knowledge of the matter.

The two bond deals are taking place as debt issuers and investors assess the likelihood a deal will be struck to end the Iran war and the Strait of Hormuz to be re-opened, factors that have driven fuel costs sharply higher.

The airline is planning to issue a three- or five-year fixed-rate Hong Kong dollar bond and possibly both, according to a term sheet seen by Reuters on Tuesday.

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A global investor call will take place on Tuesday and the bond deal could begin on Wednesday, according to the term sheet, which did not identify the size of the deal.

HSBC is the arranger of Cathay’s medium-term note programmeme, while dealers include Bank of China (Hong Kong), Barclays, BNP Paribas, DBS, Morgan Stanley, OCBC, Standard Chartered and UBS, Cathay’s offering circular showed.

The sources could not be named discussing information that had not yet been made public.

Cathay did not immediately respond to a request for comment.

Global airlines face a tough operating environment in the wake of the Iran war and surging jet fuel prices which are not expected to ease in the short term.

Cathay said earlier this month that it will cut some flights from mid-May until the end of June, citing soaring jet fuel costs triggered by the conflict. REUTERS