The Hong Kong government’s eagerly anticipated HK$6 billion securitization of toll revenues will be launched on April 19, a banker involved on the deal told ASR. Citibank and HSBC are joint lead-managers on the transaction, which will be backed by revenues from five tunnels and the Lantau Link.
The deal will be solely denominated in Hong Kong dollars, contrary to speculation among rival banks that it would include a sizeable U.S. dollar piece. Nonetheless, ASR’s source said that it would be marketed globally. He added that at least 35% of the bonds would be distributed to retail investors in Hong Kong.
That aspect of the offering is novel for Hong Kong ABS, although both Citi and HSBC have strong retail franchises in the territory. Though the deal does not feature a specific guarantee, the involvement of the government should generate strong interest from retail and institutional clients. Ratings will be AA-‘ from Fitch, Aa3 from Moody’s and AA+’ from Standard & Poor’s.
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