HKAA seeks rating before loan expiry

The Hong Kong Airport Authority could soon become the SAR''s fourth quasi-government bond issuer.

The Hong Kong Airport Authority is making moves to secure a credit rating ahead of the expiry of a HK$4 billion syndicated loan this September.

"We have invited a selection of investment banks to submit a ratings advisory proposal to us," says Alex Kam Kwong-fai, treasurer of the HKAA. "We clearly have the intention to seek a rating.

"The rating would probably take 8-10 weeks to complete. We hope it is going to be a straightforward exercise."

Hong Kong's three existing quasi-government issuers, namely MTR Corporation, Kowloon-Canton Railway Corporation and the Hong Kong Mortgage Corporation Limited, all enjoy the same ratings as the Special Administrative Region itself. The HKAA is hopeful it too will command a rating in line with Hong Kong's sovereign debt, which for foreign currency borrowings is judged A by Standard & Poor's and A3 by Moody's.

Repayments to be met

Although a credit rating would open up the global bonds markets as a source of funding for the HKAA, Kam says there is no pressure for it to do so as existing facilities, bolstered by a HK$6.5 billion syndicated loan agreed last year, are sufficient to meet the repayments falling due in September.

"We will have to look at the market to see if it would be advantageous for us to do that. As we speak today, we have no firm plans to go to the international capital market."

Beyond September, the HKAA has a HK$8.2 billion syndicated loan maturing in September 2001 and the two HK$3.25 billion tranches of its HK$6.5 billion facility are scheduled for repayment in July 2002 and July 2004. In addition to these borrowings, the HKAA has used the Hong Kong Monetary Authority's note issuance program five times, raising HK$500 million on each occasion.