Jack So says five-year syndicated loan deal lays ‘solid foundation’ for project
EDDIE.LEE@SCMP.COM
PUBLISHED : Monday, 07 December, 2015, 2:50pm
UPDATED : Monday, 07 December, 2015, 4:07pm
So said the airport needed to expand its capacity else it risked losing ground as Asia’s aviation hub. Photo: SCMP Pictures
Hong Kong’s Airport Authority is heralding a HK$5 billion loan as paving the way for more financing for the HK$141.5 billion third runway project and signalling the financial community’s backing.
The recent success in clinching a syndicated loan deal of HK$5 billion to fund the authority’s operation would “lay a solid foundation for financing the three-runway system,” said authority chairman Jack So Chak-kwong today.
He was referring to a five-year revolving credit facility signed by 21 local and international banks.
“The terms for us are excellent,” So said after the deal signing when asked whether the facility was affected by the new runway plan.
The finalised, all-in pricing of 80 basis points over the Hong Kong Inter-bank Offered Rate, or Hibor, was the lowest interest rate among club or syndicated bank loan deals with the same tenor over the past 48 months in the Hong Kong market.
The credit facility was oversubscribed by a factor of 3.4.
“This credit facility represents the global banking community’s faith in Hong Kong’s future,” So said.
The money would be used for general corporate purposes, including some preparation works for the third runway’s construction.
So said he hoped the third runway project could begin as soon as possible. He added that the new construction was practical and instrumental to enhancing the city’s competitiveness.
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“Unless we expand [our airport’s capacity], travellers are going to experience delays,” So said. “Hong Kong stands to lose its position as Asia’s aviation hub.”
He said the authority would closely supervise the project’s implementation, ensuring it would not lead to cost overruns.
The project would be funded by three sources: bank loans and issued bonds; retaining the airport’s operational surplus for project investments; and charging an airport construction fee to departing passengers.
http://m.scmp.com/news/hong-kong/economy/article/1888008/hong-kong-airport-third-runway-proposal-take-hk5-billion-loan
