HK Airport Authority looking for $5b loan

HK Airport Authority looking for $5b loan

The Airport Authority of Hong Kong is measuring market appetite as it looks for a HK$5 billion five-year syndicated loan for the first time since June 2010, according to the International Financing Review.

Funds are for general corporate purposes, said IFR, a Thomson Reuters publication.An authority spokesman said the fund-raising exercise is unrelated to the proposed construction of a third runway, estimated to cost HK$141.5 billion.

It is usual practice for the authority to seek loans for its general working capital, the spokesman stated.
The runway plan is facing a judicial review after being approved by the Executive Council, with the Environmental Protection Department approving its environmental impact assessment report and granting a conditional permit.

The government-owned authority, charged with the operation and development of the airport, has sent out invitations to relationship banks for proposals and will appoint a coordinator for the deal, the report said.
Ten mandated lead arrangers, including HSBC (0005), Hang Seng Bank (0011), Standard Chartered (2888) and Citigroup, were involved.

The borrower last tapped the market five years ago with a HK$5 billion five- year self-arranged revolving credit, with an interest rate set at 40 basis points over HIBOR, the local interbank offered rate.
The authority said it would finance the third runway project by using internal funding sources, external borrowings and charging airport users.

It earlier said it expected to raise some HK$53 billion from the market from syndicated loans and by issuing institutional bonds. But it is also considering issuing retail and Islamic bonds, Secretary for Transport and Housing Anthony Cheung Bing-leung said earlier this month.

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