HKMC Successfully Completes Second Infrastructure Loan-Backed Securities Issuance, Attracting Diverse Investor Base

HKMC's second infrastructure loan-backed securities issuance

The following is issued on behalf of the Hong Kong Monetary Authority:

The Hong Kong Mortgage Corporation Limited (HKMC) announced today (11 September) the successful completion of its second infrastructure loan-backed securities (ILBS) issuance. This is executed through a special purpose vehicle (SPV), Bauhinia ILBS 2 Limited (Bauhinia 2) and it follows the success of the HKMC's first ILBS issuance in May 2023. The Bauhinia issuances offer professional investors exposure to a diversified portfolio of project and infrastructure loans across multiple geographies and sectors.

The Executive Director and Chief Executive Officer of the HKMC,Mr Raymond Li,said, "The success of Bauhinia 2 issuance demonstrated investors; growing interest in the infrastructure loan asset class. The issuance further supports the development of Hong Kong as an infrastructure financing hub, facilitating inflow of market capital to high‑quality infrastructure projects, and expanding the securitisation market in Asia."

Bauhinia 2 issuance received strong response from investors, with some repeated investors showing increasing comfort with the asset class and expanding their investment across a wider range of note classes, and an expanded universe of investors joining this space. The expanded investor base is well diversified, including insurers, pension funds, security firms, and local and international financial institutions.

Asian Infrastructure Investment Bank (AIIB), through its US$300 million investment programme into the HKMC's ILBS issuance, participated in Bauhinia 2 as an anchor investor. AIIB's investment programme continues to fulfil its objective to mobilise private capital into the infrastructure sector.

Bauhinia 2 has a portfolio of 28 project and infrastructure loans across 26 individual projects spreading across 14 countries and 10 sub-sectors, with a total value of approximately US$423.3 million. In total, five classes of notes are issued (Class A1-SU, Class A1, Class B, Class C and Class D), all of which are investment grade rated, with aggregate principal of US$386.7 million. The issued notes are listed on The Hong Kong Stock Exchange. The HKMC acts as the sponsor, collateral manager and risk retention holder of the transaction.

Within the capital structure of Bauhinia 2, there is an US$107 million sustainability tranche (Class A1-SU) backed by sustainable, green and social assets. Class A1-SU is issued in accordance with the HKMC's Social, Green and Sustainability Financing Framework, which aligns with the Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines released by the International Capital Market Association.

Standard Chartered Bank is the Sole Global Co-ordinator. China International Capital Corporation Hong Kong Securities Limited, ING Bank N.V., Singapore Branch, MUFG Securities Asia Limited, Natixis Hong Kong Branch and Standard Chartered Bank are the Joint Bookrunners. Fubon Bank (Hong Kong) Limited and Korea Investment & Securities Co., Ltd. are the Co-Managers.

Employers, contractors and employees should be aware of electrical safety at work during rainstorm

As the rainstorm warning has been issued by the Hong Kong Observatory, the Labour Department (LD) reminds employers and contractors that they should adopt necessary work arrangements and take suitable safety measures to protect the safety of their employees when they are carrying out electrical work or handling electrical plant.

A spokesman for the LD said today (September 17) that employers and contractors should avoid assigning employees to carry out electrical work (like electric arc welding work) or handle electrical plant at places affected by rainstorms, and should refer to the "Code of Practice in Times of Adverse Weather and 'Extreme Conditions'" and the "Guide on Safety at Work in times of Inclement Weather" issued by the LD.

Even if electrical work is carried out or electrical plant is handled at places not affected by the rainstorm, suitable safety measures must still be adopted to prevent electric shock as the air would be more humid. Such measures include:

(i) Ensure that all live parts of an electrical installation are isolated from the power supply source and rendered dead, and the isolation from the power supply source must be maintained as long as electrical work is being carried out;

(ii) Before carrying out any electrical work or handling any electrical plant, cut off and lock out the power supply source, then test the circuit concerned to confirm it is dead and display suitable warning notices, and issue a work permit thereafter;

(iii) Ensure that protective devices (such as suitable and adequate fuses and circuit breakers) for the electrical installations or electrical plant have been installed and maintained in good working order, and portable electric tools must be double-insulated or properly earthed;

(iv) Provide suitable personal protective equipment such as insulating gloves and insulating mats for employees; and

(v) If live electrical work is unavoidable, a comprehensive risk assessment should be conducted by a competent person and the appropriate safety precautions should be taken to remove or properly control the electrical hazards involved before such work can proceed.

In addition, employees should co-operate with the employer or contractor to follow the safety instructions and use the safety equipment provided.

The LD has published guidebooks and leaflets on electrical work safety. These safety publications are available free from divisional offices of the department or can be downloaded from its website (www.labour.gov.hk/eng/public/content2_8.htm).

Should there be any questions about occupational safety and health matters, please contact the Occupational Safety Officer of the LD at 2559 2297.

Source: AI-generated images