Deal of the Month: HKMC’s infrastructure CLO

The deal marks the HKMC’s first infrastructure financing securitisation. It could act as a catalyst for development of this nascent asset class in Asia, as the region strives to bridge a $1.7 trillion annual infrastructure financing gap.

In May this year, the Hong Kong Mortgage Corporation HKMC priced a pilot $404.78 million project finance and infrastructure collateralised loan obligation CLO, in a deal that would mark the first asset-backed securitisation to be issued by a Hong Kong-incorporated special purpose vehicle SPV listed on the market’s stock exchange.

The transaction came about as part of the Hong Kong government’s efforts to promote the special administrative region SAR as an infrastructure financing and securitisation centre. To achieve this aim, in 2018, the government established the HKMC’s infrastructure financing and securitisation IFS division, explained Francis Edwards, head of the Greater China Derivatives and Structured Finance practice at Clifford...

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