To The Moon

On October 17, the Hong Kong Mortgage Corporation Limited announced the successful issuance of its third batch of infrastructure loan-backed securities. This issuance was conducted through a special purpose vehicle, Bauhinia ILBS 3 Limited (Bauhinia 3). Following successful issuances of infrastructure loan-backed securities in 2023 and 2024, the Mortgage Corporation is committed to the ongoing development of this asset class through regular issuances. The issuance of Bauhinia series securities offers professional investors diversified investment opportunities across different regions and sectors related to infrastructure loans. Jerry Liu, Executive Director and President of the Mortgage Corporation, stated that this latest successful issuance highlights the corporation's continuous investment in infrastructure loan-backed securities and its support for Hong Kong's development as a center for infrastructure financing. The sustained strong demand from new and existing investors indicates an increasing interest in this asset class and growing recognition of its benefits and diversification. The issuance of Bauhinia 3 received enthusiastic responses from investors, including both new and existing participants, with heightened demand from investors outside of Asia. The expanded investor base is highly diversified, encompassing asset management companies, corporations, family offices, financial institutions, insurance companies, private banks, and brokerage firms. The Asian Infrastructure Investment Bank (AIIB) continues to be a cornerstone investor with a $300 million investment plan in the Mortgage Corporation's infrastructure loan-backed securities, aligning with its goal of bringing private capital into the infrastructure sector. The Bauhinia 3 portfolio involves 33 projects and infrastructure debts across 12 countries, 28 standalone projects, and 9 sub-sectors, with a total value of approximately $450.5 million. The issued notes are categorized into five grades (A1-SU, A1, B, C, and D), totaling $427.9 million, and will be listed on the Hong Kong Stock Exchange. Based on the quality of the portfolio and the increasing interest from investors in infrastructure loan-backed securities, the Mortgage Corporation has issued D-grade notes, which are non-investment grade, for the first time in Asia, further enhancing capital structure efficiency. The Mortgage Corporation acts as the initiator, collateral manager, and risk holder for this transaction. Within the capital structure of Bauhinia 3, $117 million consists of sustainable financing notes (A1-SU) that incorporate elements of sustainability, green, and social responsibility. The A1-SU notes were issued under the Mortgage Corporation's "Social, Green and Sustainable Finance Framework," aligning with the Green Bond Principles, Social Bond Principles, and Sustainability Bond Guidelines established by the International Capital Market Association. This issuance was exclusively coordinated by Standard Chartered Bank. BNP Paribas, China International Capital Corporation Hong Kong Securities Limited, ING Bank Singapore Branch, Mitsubishi UFJ Securities Asia Limited, and Standard Chartered Bank acted as joint bookrunners, while Fubon Bank (Hong Kong) Limited served as a co-manager.