The Hong Kong Mortgage Company (HKMC) has accomplished its second infrastructure loan-backed securities (ILBS) issuance of $423.3 million, in accordance with a latest announcement.
The issuance was organized via a particular objective automobile (SPV), Bauhinia ILBS 2 (Bauhinia 2) and it follows HKMC’s first ILBS issuance in Could 2023 for $404.8 million below Bauhinia 1, which was a part of HKMC’s pilot scheme for infrastructure financing securitisation.
The HKMC, which is headquartered within the Worldwide Commerce Centre (ICC) in West Kowloon, made a loss after tax of HK$260 million ($33.4 million) in 2023 in contrast with an after tax revenue of HK$2.16 billion in 2022.
There are some repeat buyers, whereas new buyers embrace insurers, pension funds, safety companies, and native and worldwide monetary establishments. The Asian Infrastructure Funding Financial institution (AIIB), via a $300 million funding programme, participated in Bauhinia 2 as an anchor investor, following an identical path in Bauhinia 1, because the AIIB continues to position personal capital into the infrastructure sector.
Bauhinia 2 has a portfolio of 28 undertaking and infrastructure loans throughout 26 particular person initiatives spreading throughout 14 nations and 10 sub-sectors, with a complete worth of roughly $423.3 million. In complete, 5 lessons of notes have been issued: Class A1-SU, Class A1, Class B, Class C and Class D; these have been all funding grade rated, with an mixture principal of $386.7 million. The issued notes are listed on The Hong Kong Inventory Alternate (HKEX).
The HKMC was the sponsor, collateral supervisor and threat retention holder of the transaction.
Inside the capital construction of Bauhinia 2, there’s a $107 million sustainability tranche (Class A1-SU) backed by sustainable, inexperienced and social belongings. Class A1-SU was issued in accordance with the HKMC’s Social, Inexperienced and Sustainability Financing Framework, which aligns with the Inexperienced Bond Ideas, Social Bond Ideas and Sustainability Bond Tips launched by the Worldwide Capital Market Affiliation.
The HKMC has not too long ago issued experiences on how its framework has been performing over the previous couple of years, with a HK$8 billion tranche issued in October 25, 2022 to mature on October 25, 2024.
Engaged on Bauhinia 2, Commonplace Chartered Financial institution was the only world coordinator, whereas China Worldwide Capital Company Hong Kong Securities, ING Financial institution, Singapore Department, MUFG Securities, Natixis Hong Kong Department and Commonplace Chartered Financial institution have been the joint bookrunners. Fubon Financial institution (Hong Kong) and Korea Funding & Securities are the co-managers.
The authorized counsels have been Linklaters and Clifford Probability.
Raymond Li, govt director and chief govt officer (CEO) of the HKMC, stated within the assertion, “The success of Bauhinia 2 issuance demonstrated buyers’ rising curiosity within the infrastructure mortgage asset class. The issuance additional helps the event of Hong Kong as an infrastructure financing hub, facilitating influx of market capital to high-quality infrastructure initiatives, and increasing the securitisation market in Asia.”
In February this 12 months, HKMC issued HK$12 billion of bonds below its US$30 billion medium time period observe programme. On the time, this was the biggest HKD senior unsecured public bond transaction and the biggest 10-year HKD public issuance within the institutional market.
New CEO
In the meantime, Colin Pou Hak Wan is about to turn into the brand new CEO of the HKMC with impact from December 26, 2024, in accordance with an announcement in the summertime.
Pou, who’s the chief director or the monetary infrastructure division on the Hong Kong Financial Authority (HKMA), will succeed Raymond Li who can be retiring from the HKMC after 11 years on the agency.
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