Bonds boost: Secretary for Financial Services & the Treasury Frederick Ma says the $6 billion securitisation of revenues from government-owned tunnels and bridges has set records for others to emulate.

The Government has launched the sale of $6 billion in bonds, based on revenues from government-owned tunnels and bridges. The net proceeds of this securitisation will flow into the Capital Works Reserve Fund to help finance infrastructure projects.

Speaking at the launch ceremony, Secretary for Financial Services & the Treasury Frederick Ma said the offering has set records for others to emulate.

It is the largest securitisation bond offering ever in Hong Kong, he said, and among the largest in the region. It will be delivered through the largest retail distribution network ever established for a bond issue in Hong Kong.

More than 800 branches of 23 placing banks will be involved, along with all interested brokers who may participate through the Hong Kong Stock Exchange's Central Clearing & Settlement System.

Three credit-rating agencies have given a thumbs-up to the launch. Standard & Poor's rated it AA-, Moody's rated it Aa3 and Fitch rated it AA+.

First securitisation bond offering for retail investors

It is not only the first securitisation bond offering by the Government, Mr Ma said. It is also the first securitisation bond offering available to retail investors. 

"The securitisation bonds will be listed on the Hong Kong Stock Exchange, another first," he said.

Investors may buy or sell the retail bonds through brokers or the participating banks.

There are three tranches of retail bonds, with maturities of three (2.75%), five (3.6%) and seven (4.28%) years. The minimum denomination is $50,000.

The institutional offerings will comprise two tranches of Notes, one with a one-year tenor and the other with a 12-year legal final maturity.

HSBC is the global coordinator of the securitsation and the sole bookrunner for the retail offering. HSBC and Citigroup are the joint lead managers for the institutional offering.

Tunnel, bridge users are targetted investors

The Government's intention is to maximise the distribution of bonds to interested retail investors who may make use of the tunnels and bridges on a daily basis and are familiar with them.

As the first securitisation of Hong Kong-based toll roads, he said, this offering will be the first opportunity for retail and institutional investors to participate in this asset class.

The toll bridges and tunnels are the Lantau Link - including the Tsing Ma Bridge, the Ma Wan Viaduct and the Kap Shui Mun Bridge; and the Aberdeen, Cross-Harbour, Lion Rock, Shing Mun and Tseung Kwan O Tunnels.