HONG KONG – MTR Corp – Hong Kong’s sole rail operator – has raised 3 billion euro ($3.5 billion) through its first euro-denominated public green bond issuance.
The transaction marks the largest bond deal for the rail giant and represents the largest Asia ex-Japan non-sovereign euro green bond offering, the company said in a statement.
Issued in three tranches with maturities of 8, 12 and 20 years, the transaction attracted broad-based demand from a diverse pool of institutional investors, according to the Hong Kong Special Administrative Region government majority-owned public transport operator and property developer.
Rated “AA+” by Standard & Poor’s and “Aa3” by Moody’s, the 1 billion-euro eight-year tranche, 1 billion-euro 12-year tranche and 1 billion-euro 20-year tranche were priced with coupons of 3.25 percent, 3.625 percent and 4.125 percent, respectively.
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The 20-year tranche, the first-ever Asia ex-Japan non-sovereign 20-year euro bond offering, was particularly well received by long-term institutional investors, including fund managers, insurance companies, official institutions and pension funds, said the rail operator.
The combined orderbook peaked at 10.2 billion euro, representing over 3 times the total issue size, it added.
“Supported by strong demand, the tranches achieved the lowest credit spreads for their respective tenors among all Asia non-sovereign public euro bonds.”
The transaction further broadened the company’s international investor base, with nearly 70 percent of the notes allocated to non-Asia investors.
The announcement comes with MTR Corp entering a new phase of growth of its low-carbon railway infrastructure in Hong Kong.
As part of the company’s financing program, proceeds from this issuance will be used to invest in eligible green projects, it said.
