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HKMC signs infrastructure loans deal with five banks

Out-Law News | 26 Mar 2021 | 1:45 am |

The Hong Kong Mortgage Corporation (HKMC) has signed a deal on an infrastructure loans framework with five partner banks.

Under the deal partner banks will identify infrastructure-related loan assets for the HKMC and further the mission of the HKMC's infrastructure financing and securitisation business, it said.

The memorandum of understanding (MOU) sets out the loan selection criteria, participation model and engagement procedures between the HKMC and its partner banks according to a statement.

Finance expert Kanyi Lui of Pinsent Masons, the law firm behind Out-Law, said: “As noted by the World Bank, emerging economies currently have a $1.3 trillion annual infrastructure gap. Meeting this gap in a sustainable way is the challenge for our generation. This MOU and the MOU recently entered into between HKMC and Sinosure paves the way for increased collaboration and coordination on infrastructure financing. HKMC’s loan securitisation expertise and the pipeline of high-quality infrastructure loan assets these banks and Sinosure can provide are highly complementary and can be expected to provide additional liquidity for international infrastructure financing.” 

The five banks are Crédit Agricole Corporate and Investment Bank, HSBC, ING Bank, Natixis SA, and Standard Chartered Bank.

HKMC was established in 1997 and is owned by the Hong Kong Special Administrative Region (HKSAR) government through the Exchange Fund. It started its infrastructure financing and securitisation business in 2019.