Linklaters advises The Hong Kong Mortgage Corporation on the first infrastructure loan backed securities issuance in Hong Kong SAR

Linklaters advised The Hong Kong Mortgage Corporation Limited (HKMC) on the offering of the first infrastructure loan backed securities (ILBS) in Hong Kong SAR. HKMC acted as collateral manager, sponsor and retention holder on this inaugural issuance.

The successful issuance comprises of US$100m Class A1-SU Notes due 2044, US$199.6m Class A1 Notes due 2044, US$36.5m Class B Notes due 2044, US$18.25m Class C Notes due 2044, US$10m Class D Notes due 2044 and US$40.432m Subordinated Notes due 2044. The Class A1-SU Notes are considered Secured Sustainability Standard Bonds under the ICMA Green Bond Principles 2021, Social Bond Principles 2021 and Sustainability Bond Guidelines 2021; the proceeds will be allocated to the purchase of eligible loans under HKMC’s Social, Green and Sustainability Financing Framework.

The ILBS are a securitisation backed by a portfolio of senior secured project and infrastructure finance loans spread across a number of industries and regions. As an emerging asset class, this successful transaction not only set a benchmark for the structure of ILBS issuances in the market, but also contributes to the enhancement of infrastructure financing by introducing additional sources of financing into the infrastructure sector.

The Linklaters team was led by structured finance and derivatives partners Victor Wan and Karen Lam.

Linklaters has an established reputation as a leader in the structured finance space, its continuous involvement in pioneering and innovative transactions is a strong testament to the firm’s capabilities and technical expertise.