Hong Kong’s airport eyes $2.6 billion loan for third runway

Hong Kong’s Airport Authority is in talks with banks for an HK$20 billion ($2.6 billion) loan to help fund the city’s third runway, according to people familiar with the matter.

The five-year facility, which is also meant for general corporate purposes, offers an interest margin of 72 basis points over the Hong Kong interbank offered rate and a top-level all-in of 82 basis points, said the people who are not authorized to speak publicly and asked not to be identified.

The Airport Authority could not immediately respond to a request for comment when reached by telephone and email. The borrower has a HK$5 billion five-year revolver due December, data compiled by Bloomberg show.

The fundraising comes even as air traffic has plunged in the wake of the coronavirus pandemic. Funding costs have also risen for banks in Greater China amid a global dollar liquidity squeeze.