HKU establishes a $1 billion USD medium-term note program to issue bonds to meet funding needs

This report says that the University of Hong Kong, via HSBC arrangements, will hold a two-day non-deal roadshow (Non-Deal Roadshow, referred to as NDR) investor meeting this Wednesday, in an estimated effort to secure bond financing for underwriting. Regarding whether this is a preliminary move for bond issuance and to establish a medium-term note program (MTN Program), a spokesperson for HKU replied to our report that HKU has signed a $1 billion (about more than HK$7.8 billion) medium-term note fund-raising program, which will enable it to issue bonds to meet funding needs.

Establishing a medium-term note program is a common arrangement for large corporates or institutions that participate in the capital markets. Through setting up such a framework, issuers can repeatedly issue bonds at any time, with flexibility and in response to market conditions, without having to re-prepare the relevant bond-issuance documents every time an issuance is made. The total ceiling amount of the program can also be increased in the future as needed.

The latest “Budget” mentions that the government will release three land parcels for a university city in the Northern Metropolis area. HKU intends to apply to the government for the land to expand its development, and the university’s management has also previously said that it will not rule out bond financing in the future.