MTR Secures $3B: Hong Kong Rail Expansion & Future Investment

MTR Corporation Secures USD 3 Billion in Landmark Perpetual Securities Offering

Hong Kong, June 18, 2025 – MTR Corporation (MTR), the operator of one of the world’s most efficient railway systems, announced the successful completion of its inaugural dual-tranche subordinated perpetual securities offering, raising an impressive USD 3 billion. This landmark transaction, executed on June 16, 2025, under the Corporation’s USD 15 billion Debt Issuance Programme, marks the largest such issuance by a corporate in Asia excluding Japan. The offering, which comprised equal tranches with 5.5 and 10.5-year non-call periods, garnered exceptional investor interest, exceeding the issue size by more than five times. This article delves into the specifics of the offering, its implications for MTR’s financial strategy, and the broader significance for Hong Kong’s infrastructure development, exploring how MTR’s innovative financing strategy underscores its commitment to future railway expansion and enhancements.

Unprecedented Market Response & Financial Ratings

The issuance, structured under Regulation S, drew a staggering USD 16 billion in orders, significantly surpassing the USD 3 billion total offering size. This robust demand underscores the strong confidence institutional investors hold in MTR’s long-term prospects and its pivotal role in Hong Kong’s transport network. The final order book included diverse investors, such as insurance companies, asset managers, banks, securities houses, sovereign wealth funds from both Asia and the Middle East, family offices, and private banks. The subordinated perpetual securities received the highest issue ratings ever assigned to a USD corporate subordinated perpetual offering: “A” from Standard & Poor’s (S&P) and “A2” from Moody’s. These ratings reflect MTR’s strong operational track record, its strategic importance to Hong Kong’s transport and infrastructure network, and the stability of its financial standing within a complex market.

Strategic Alignment and Investor Confidence

Michael Fitzgerald, Finance Director of MTR Corporation, highlighted the transaction’s significance: “The successful issuance… underscores the strategic importance of MTR in the infrastructure development of Hong Kong, and the market confidence toward it.” He further noted the appeal of Hong Kong as a global financial hub, facilitating the transaction and attracting both existing and new investors from around the world. The successful issuance, a direct result of the attractiveness of investment opportunities in Hong Kong, aligns with the corporation’s goal of expanding and enhancing railway infrastructure.

Structure and Capital Allocation Benefits

The dual-tranche structure provides MTR with two distinct maturity profiles. Both tranches, essential for bolstering the Corporation’s financial strength, qualify as 100% equity on MTR’s balance sheet. They also receive 50% equity credit from both Moody’s and S&P, providing flexibility for future investment. “MTR is embarking on a new phase of railway investment,” Fitzgerald added, “contributing to a more comprehensive and seamlessly connected low-carbon public transportation network for Hong Kong’s future.” The funds raised are intended to support MTR’s capital investment requirements, including network expansions, asset upgrades, and improvements to service delivery, with a clear commitment towards sustainable transport solutions.

Industry Collaboration and Key Players

The deal was spearheaded by a consortium of Joint Global Coordinators, Joint Bookrunners, and Joint Lead Managers: Crédit Agricole CIB, HSBC, J.P. Morgan, Société Générale, and UBS. Additional support came from ANZ, Bank of China, Barclays, DBS, Deutsche Bank, Mizuho, and Standard Chartered Bank, all of whom acted as Joint Bookrunners and Joint Lead Managers. The collaborative approach between financial institutions highlights a shared commitment to the expansion of Hong Kong’s railway system.

Conclusion

MTR Corporation’s USD 3 billion subordinated perpetual securities offering signifies a pivotal moment in its financial strategy and underlines robust investor confidence in the company’s future. The overwhelmingly positive response to the offering, backed by high credit ratings from S&P and Moody’s, demonstrates the Corporation’s operational excellence and its significance to Hong Kong’s infrastructure. The dual-tranche structure, providing capital flexibility for MTR, will be pivotal in future railway expansion and upgrading of operational assets, thus, improving and expanding Hong Kong’s connectivity. Furthermore, the success of the offering showcases Hong Kong’s position as a premier financial hub and an attractive investment destination. The funds raised will bolster the company’s capacity to invest in network expansions, upgrades, and enhancements, reinforcing its commitment to sustainable and advanced transport. This transaction sets a precedent for other railway operators considering innovative financing models and underscores the importance of strategic capital planning for long-term growth and infrastructure development in a complex market.

Company Summary

MTR Corporation (MTR) is a world-leading railway operator known for its high efficiency, reliability, and sustainability. As a key player in Hong Kong’s public transport system, MTR manages a network that carries millions of passengers daily, while actively contributing to the city’s sustainable development with a focus on low-carbon transportation. MTR’s expertise also extends to property development along its railway lines, enhancing its financial capabilities and supporting the development of Hong Kong’s infrastructure. The company is committed to innovation and constantly invests in new technologies and improved service delivery to enhance its operations and the passenger experience.