The Hong Kong Mortgage Corporation Limited ("HKMC") successfully completed its third infrastructure loan-backed securities ("ILBS") issuance on 17 October 2025. The issuance, executed through a special purpose vehicle ("SPV"), Bauhinia ILBS 3 Limited, builds on previous successful ILBS issuances. The issuance received strong demand from new and existing investors, including those outside Asia, and is part of the AIIB's US$300 million investment program. The portfolio includes 33 loans worth approximately US$450.5 million across various geographies and sectors, with five classes of notes issued. This issuance introduces the first non-investment grade ILBS (Class D) in Asia, enhancing the capital structure's efficiency. The sustainability tranche (Class A1-SU) backed by sustainable assets aligns with green and social bond principles.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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The Hong Kong Mortgage Corporation Limited ("HKMC") successfully completed its third infrastructure loan-backed securities ("ILBS") issuance on 17 October 2025. The transaction was executed through a Hong Kong special purpose vehicle ("SPV"), Bauhinia ILBS 3 Limited (Bauhinia 3). This issuance follows successful ones in 2024 and 2023, demonstrating the HKMC’s commitment to developing the ILBS asset class through regular offerings.
Executive Director and Chief Executive Officer Colin Pou commented on the successful issuance, 'This is another testament to the HKMC’s dedication to ILBS and Hong Kong’s status as an infrastructure financing hub. The robust investor demand, including new and existing participants, highlights the growing recognition of the benefits and diversification this asset class offers.'
The Bauhinia 3 issuance attracted a diverse and expanding investor base, encompassing asset managers, corporates, family offices, financial institutions, insurers, private banking firms, and security firms. Notably, the Asian Infrastructure Investment Bank ("AIIB") acted as an anchor investor, committing US$300 million to the programme.
The portfolio of Bauhinia 3 includes 33 project and infrastructure loans across 28 projects in 12 countries and 9 sub-sectors, with a total value of approximately US$450.5 million. It includes five classes of notes with an aggregate principal of US$427.9 million, all listed on The Hong Kong Stock Exchange.
This issuance featured a unique component: the first issuance of Class D notes in Asia at a non-investment grade, enhancing the efficiency of the capital structure. The HKMC serves as the sponsor, collateral manager, and risk retention holder. Additionally, a US$117 million sustainability tranche (Class A1-SU) was backed by sustainable, green, and social assets, aligning with the HKMC’s Social, Green, and Sustainability Financing Framework.
Standard Chartered Bank acted as the Sole Global Coordinator, while BNP Paribas, China International Capital Corporation Hong Kong Securities Limited, ING Bank N.V., Singapore Branch, MUFG Securities Asia Limited, and Standard Chartered Bank were Joint Bookrunners. Fubon Bank (Hong Kong) Limited served as the Co-Manager.
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