Airport Authority Prices Debut US$1.5 Billion Perpetual Capital Securities

The Securities have not been and will not be registered under the United States Securities Act of 1933 (the “Securities Act”) or any state securities laws or other jurisdiction of the United States and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act (“Regulation S”)) absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements under the Securities Act and any applicable state or local securities laws of the United States. This release is not for release, publication or distribution, directly or indirectly, in or into the United States or any other jurisdiction in which such distribution would be prohibited by applicable law. Persons into whose possession this release or such other information comes should inform themselves about and observe any such restriction.

(HONG KONG, 2 December 2020, 1130hrs) – Airport Authority Hong Kong (AA) announces that it has successfully priced a dual-tranche debt securities offering consisting of US$750 million non-call 5.5-year and US$750 million non-call 7.5-year perpetual capital securities (the Securities). The transaction marks the AA's debut foray into the perpetual bond market, which is also the first US dollars senior perpetual offering in the public bond market from an airport globally. The proceeds from the Securities will be used to fund capital expenditure of the AA including the Three-runway System Project (3RS) and for general corporate purposes.

The Securities are expected to be issued on 8 December 2020, subject to the satisfaction of certain conditions precedent and are expected to be listed on The Stock Exchange of Hong Kong Limited. Orderbook for the non-call 5.5-year and non-call 7.5-year tranche peaked at US$6.5 billion and US$8.0 billion respectively with over 280 professional and institutional investors across Asia and Europe participating in the transaction. The 8.7 times and 10.7 times oversubscription rate for the two tranches enabled the AA to price the offering at 2.1% and 2.4%, which were 65 and 70 basis points tighter than initial price guidance, achieving the lowest coupon rate ever for a US dollars denominated Asian corporate hybrid transaction.

Jack So, Chairman of the AA said, “We are very pleased with the overwhelming response from the global investor community, which is a testimony to the market’s confidence in Hong Kong International Airport's business recovery when the pandemic subsides. We would also like to thank the Chief Executive for the supportive measures in the Policy Address that will strengthen our airport as an international aviation hub.”

The construction of the 3RS commenced in August 2016. The 650-hectare reclamation is practically complete. The entire project targets completion in 2024 at a construction cost of HK$141.5 billion in money-of-the-day terms.

The Securities are rated “AA” by Standard & Poor’s, one notch lower than the current credit rating of the AA to account for its optional coupon deferral feature. The Securities investors include a mix of professional investors: sovereign wealth funds, asset managers, government agencies, corporations, banks and insurance companies.

The Joint Global Coordinators and Joint Book-Runners are HSBC, Standard Chartered Bank and UBS, and Joint Book-Runners are BofA Securities, Bank of China and Mizuho Securities.

Important Notice

This release is for information purposes only and does not constitute or form part of any offer to purchase, a solicitation of an offer to purchase, an offer to sell or an invitation or solicitation of an offer to sell, issue or subscribe for, securities in or into the United States or in any other jurisdiction, nor should it or any part of it form the basis of, or be relied in any connection with, any contract or commitment whatsoever.

The Securities have not been and will not be registered under the Securities Act or any state securities laws or other jurisdiction of the United States, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements under the Securities Act and any applicable state or local securities laws of the United States. The securities referred to herein will be offered and sold only outside the United States in accordance with Regulation S under the Securities Act. There will be no public offering of securities in the United States. Terms used in this paragraph have the meanings given to them by Regulation S under the Securities Act.