Hong Kong airport prepares for return to travel with bond sale

HONG Kong’s Airport Authority has begun marketing a four-part debt deal, joining a global rush to sell bonds as it jump-starts operations after more travel restrictions were lifted.

The planned sale includes a five-year green tranche that will be used to finance or re-finance eligible environmental projects, according to people familiar with the matter. The airport is also marketing three-year, seven-year and 10-year notes whose proceeds will be used to fund capital expenditure including a three-runway system project and for general corporate purposes.

The airport is planning to issue bonds as China lifts more travel bans, with Hong Kong’s preparation in full swing to open the border again with the mainland as early as Jan 8.

Signs of a pick-up in travel demand are already emerging: Hong Kong saw a net 34,736 passenger arrivals through airports, overland and by sea for the week ended Jan 1, up from 4,439 net departures a year ago, according to data from the Hong Kong Immigration Department. Strict virus-control measures the past three years had led to the suspension of many flights.

The debt offering, which may be priced as early as today, would be the airport’s first in US dollars in a year. That deal last January was one of the largest ever in the industry.

But those bonds suffered amid the global debt-market rout, with the yield on a five-year 1.75 per cent green bond that it issued at the time climbing to 4.4 per cent, according to Bloomberg-compiled data.

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The turnaround in travel comes after Hong Kong International Airport carried about 4.05 million passengers last year, plunging from 71.5 million in 2019 before the pandemic, according to figures on its website. BLOOMBERG