MTR Corporation Achieves Historic USD3 Billion Securities Issuance in Asia

MTR Corporation Limited (MTRCL) has successfully completed the largest-ever issuance of USD corporate subordinated perpetual securities in Asia, excluding Japan. The issuance, which amounted to USD3 billion, was advised by the prestigious law firm Slaughter and May and represents a significant milestone in the corporate financing landscape of the region. This groundbreaking issuance took place on June 25, 2025, and is a part of MTRCL's broader USD15 billion Debt Issuance Programme.

The securities, issued through MTR's wholly-owned subsidiary, MTR Corporation (C.I.) Limited (MTRCI), are structured in two equal tranches. The first tranche offers a fixed distribution rate of 4.875% per annum for the initial 5.5 years, after which the rate will be reset every five years. The second tranche carries a higher fixed rate of 5.625% per annum for the first 10.5 years, with similar reset provisions thereafter. Both tranches include step-up margins that apply after specific durations.

The structure of these securities allows for deferral of distributions at MTRCI’s discretion, provided that MTRCI and MTRCL adhere to certain conditions regarding their financial obligations. Notably, the securities qualify as 100% equity on MTR's balance sheet and have been given favorable equity treatment by leading credit rating agencies. Moody's assigned an 'A2' rating, while Standard & Poor's rated the securities 'A,' marking them as the highest issue ratings ever granted by these agencies for a USD corporate hybrid issuance globally.

Crédit Agricole CIB, HSBC, J.P. Morgan, Société Générale, and UBS served as Joint Global Coordinators, Joint Lead Managers, and Joint Bookrunners for this historic issuance. Additional support was provided by ANZ, Bank of China (Hong Kong), Barclays, DBS, Deutsche Bank, Mizuho, and Standard Chartered Bank, all of which acted as Joint Lead Managers and Joint Bookrunners as well.

This issuance not only bolsters MTR’s financial standing but also reflects the growing confidence of investors in the corporate bond market within Asia. According to Dr. Lisa Wong, Professor of Finance at the University of Hong Kong, "The successful issuance of these securities showcases MTR's strong credit profile and the increasing demand for hybrid securities in Asia's financial landscape."

Furthermore, the issuance is expected to enhance MTR's capital structure and provide additional liquidity to support its ongoing infrastructure projects. The funds raised will primarily be allocated for expansion initiatives and improvements to the existing railway network, which is vital for sustaining economic growth in the region.

As the Asia-Pacific region continues to evolve in its financial instruments, this issuance by MTR Corporation sets a precedent for future corporate bond issuances, potentially inspiring other companies to explore similar paths in capital raising. The implications of this successful issuance may lead to more robust participation from institutional investors, further solidifying the region's position as a significant player in the global capital markets.

In conclusion, as MTR Corporation embarks on this new chapter, the impact of this securities issuance will likely resonate throughout the corporate financing landscape in Asia, paving the way for innovative financial strategies and enhanced infrastructure development in the years to come.