Clifford Chance

Clifford Chance advises on HKMC's US$423.3 million infrastructure loan-backed securities issuance

Global law firm Clifford Chance has advised Standard Chartered Bank as sole global coordinator and China International Capital Corporation Hong Kong Securities Limited, ING Bank N.V., Singapore Branch, MUFG Securities Asia Limited, Natixis Hong Kong Branch and Standard Chartered Bank as joint bookrunners on The Hong Kong Mortgage Corporation Limited (HKMC)'s second infrastructure loan-backed securities (ILBS) issuance.

This transaction is executed through a Hong Kong incorporated orphan special purpose vehicle Bauhinia ILBS 2 Limited. The issued notes are listed on The Hong Kong Stock Exchange. The HKMC acts as the sponsor, collateral manager and risk retention holder of the transaction.

This transaction has a portfolio of 28 project and infrastructure loans across 26 individual projects spreading across 14 countries and 10 sub-sectors, with a total value of approximately US$423.3 million. In total, five classes of rated notes are issued (Class A1-SU, Class A1, Class B, Class C and Class D), all of which are investment grade rated, with aggregate principal of US$386.7 million. Within the capital structure, there is an US$107 million sustainability tranche (Class A1-SU) backed by sustainable, green and social assets. Class A1-SU is issued in accordance with the HKMC's Social, Green and Sustainability Financing Framework, which aligns with the Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines released by the International Capital Market Association.

The project was led by Hong Kong based partner Francis Edwards and Dauwood Malik with support from foreign legal counsel Lin Lu, senior associate Nicholas Henneberry and associate Greg Chan.

A separate Clifford Chance team led by London-based partner Bruce Kahl with support from senior associates Andrew Whelan and Struan Murray and associate Micah McDonald advised DB Trustees (Hong Kong) Limited as the trustee.

Francis Edwards said, "We'd like to congratulate HKMC, Standard Chartered Bank, CICC, ING, MUFG and Natixis on this successful transaction. We are proud to continue supporting HKMC's ILBS issuances in Hong Kong which consolidates the vital role of Hong Kong as an infrastructure financing and securitisation hub and international financial centre."

Clifford Chance is a market leader in securitisation and sustainable finance, having advised on HKMC's first US$404.8 million ILBS issuance in May 2023.

HKMC is a company wholly owned by The Government of the Hong Kong Special Administrative Region of the People's Republic of China (Hong Kong Government) through the Exchange Fund.