Hong Kong mortgage securities companies issue the third batch of infrastructure loan mortgage securities.

On October 17th, Hong Kong Mortgage Corporation Limited announced the successful issuance of the third batch of Infrastructure Loan Backed Securities (ILBS). This issuance was carried out through a special purpose vehicle, Bauhinia ILBS 3 Limited (Bauhinia 3). Following the successful issuances of ILBS in 2023 and 2024, the mortgage securities company is committed to continuing regular issuances to develop this asset class. The issuance of Bauhinia series securities provides professional investors with diversified projects and infrastructure loan opportunities spanning different regions and industries. Boaz Yung, Executive Director and Chief Executive of the Mortgage Securities Company, stated that the successful issuance once again demonstrates the company's ongoing commitment to ILBS and support for Hong Kong's development as a financing center for infrastructure. The continued strong demand from both new and existing investors shows a growing interest in this asset class and recognition of its benefits and diversification. The issuance of Bauhinia 3 received enthusiastic responses from investors, including both new and existing investors, with increased demand from investors outside of Asia. The expanded investor base is highly diversified, including asset management companies, corporations, family offices, financial institutions, insurance companies, private banks, and securities firms. The Asian Infrastructure Investment Bank (AIIB) continues to anchor investors by investing a total of $300 million in the Mortgage Securities Company's ILBS issuance plan, participating in the issuance of infrastructure loan-backed securities. AIIB's investment plan continues to work towards its goal of bringing private capital into the infrastructure sector. The Bauhinia 3 portfolio includes 33 projects and infrastructure debts in 12 countries, 28 independent projects, and 9 sub-industries, with a total value of approximately $450.5 million. The issued notes are divided into five tranches (A1-SU, A1, B, C, and D), totaling $427.9 million, and are listed on the Hong Kong Stock Exchange. Based on the quality of the asset portfolio and increased investor interest in ILBS, the Mortgage Securities Company has issued non-investment grade D-level notes for the first time in Asia, further enhancing capital structure efficiency. The Mortgage Securities Company acted as the originator, collateral manager, and risk retainer for this transaction. In the capital structure of Bauhinia 3, $117 million consists of sustainable financing notes (A1-SU) composed of assets with sustainable development, green, and social responsibility elements. The A1-SU notes were issued under the Mortgage Securities Company's "Social Responsibility, Green and Sustainable Finance Framework," in line with the International Capital Market Association's principles for green bonds, social responsibility bonds, and sustainable bond guidelines. Standard Chartered Bank served as the sole global coordinator for this issuance. BNP Paribas, China International Finance Hong Kong Securities Limited, ING Bank Singapore Branch, Mitsubishi UFJ Securities Asia Limited, and Standard Chartered Bank acted as joint bookrunners. Fubon Bank (Hong Kong) Limited served as a co-underwriter.