Institutional investors jump on Hong Kong's tunnel deal

The HK$6bn professional tranche of the Hong Kong Link 2004 offer prices tight thanks to strong demand.

Investors have snapped up the institutional tranches of Hong Kong's HK$6 billion $769 million tunnel securitization despite it being priced at the bottom of the expected range. And the order book for the ground-breaking retail tranches is also comfortably over-subscribed.

The offer, which securitizes toll revenue from five tunnels and the Lantau Link, is unparalleled in the region and, in some respects, the world. These asset-backed bonds, typically a specialist product bought by professional investors and disregarded...

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