Hong Kong airport raises HK$19 billion amid local-debt boom

[HONG KONG] Hong Kong’s airport operator raised HK$19 billion (S$3.1 billion) from what is expected to be its only public bond sale this year. This added to a surge in debt sales denominated in the city’s currency.

The Airport Authority sold three, five and 10-year bonds in Tuesday’s (Apr 28) transaction, said a source who asked not to be identified. The 10-year note will yield 3.38 per cent, versus an initial price talk of about 3.75 per cent, the source added.

A spokesperson said that the authority was raising funds to refinance debt, fund capital spending and support general corporate purposes. It first sold a public bond in the local currency in 2024.  

The offering highlighted the rising appeal of public bonds denominated in Hong Kong dollars, a market long dominated by private placements. This comes as geopolitical tensions and the currency’s peg to the US dollar boost investor demand.

The transaction comes after deals from government-backed public transport operator and developer MTR, and flagship carrier Cathay Pacific Airways. Both priced their first public Hong Kong dollar bonds in April.

At a roadshow on Monday, some investors asked about the 11 Skies mall, sources said. The future of the mega project beside the Hong Kong airport has been uncertain, after it faced a slew of tenants terminating leases before it fully opened.

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A spokesperson for Airport Authority reiterated the operator’s previous statement that it viewed 2028 as the right time to open the mall in phases, alongside the completion of other expansions at the airport, including a large marina for yachts.

A spokesperson for New World Development, the project’s builder, did not respond to a request for comment. BLOOMBERG