MTR Corporation issues first Green Bond to drive investment in service enhancements and environmental performance

First Green Bond from Asian rail corporate in line with Green Bond Principles and with Second Party Opinion

Sunshine on train tracks

MTR Corporation Limited (the “Corporation”) announced today (24 October 2016) it has successfully issued its first ever Green Bond. The US$600 million 10-year Green Bond (the “Bond”) was issued under the Corporation’s US$4.0 billion Debt Issuance Programme and is fully guaranteed by the Corporation.

“As a low-carbon transport operator, we are pleased with the issuance of our first Green Bond which is a milestone for both our financial and environmental strategies. Utilising green finance in this way allows us to tap into a new investor base and provide cost effective financing to invest in environmentally friendly service and network enhancements as envisaged in the Rail Gen 2.0 vision. We are also happy to be able to play a role in helping Hong Kong to develop as a regional green finance hub,” said Mr Lincoln Leong, Chief Executive Officer of MTR Corporation.

The issuance of the Corporation’s Green Bond was welcomed by Ms Christine Loh, Under Secretary for the Environment of the Hong Kong SAR Government, who said: “We are very pleased to see the MTR's successful issuance of the Green Bond which is underpinned by rail being a low carbon mode of mass transport. We see the MTR as an essential stakeholder and facilitator in Hong Kong's low carbon transition; and the good response to this Green Bond issuance shows the financial community's growing interest in investing in responsible and sustainable companies. ”

The Corporation’s Green Bond is prepared according to Green Bond Principles, and is made publically available together with the Second Party Opinion from Sustainalytics (see Appendix for more details).

The Bond was priced at the tight end of the indicated price range following strong demand from a diverse group of institutional investors and green investors in Hong Kong, Asia and Europe.

Carrying a coupon rate of 2.5% per annum payable semi-annually with a maturity date of 2 November 2026, the Bond was priced at 99.675% face amount with an overall yield of 2.537%, 80 basis points over the benchmark 10-year US Treasury yield. The Bond is expected to be rated “AAA” and “Aa1” by Standard & Poor’s and Moody’s Investor Services respectively, both on par with the sovereign ratings of the Hong Kong SAR Government.

HSBC, Bank of America Merrill Lynch and Goldman Sachs (Asia) L.L.C. acted as the Joint Bookrunners and Lead managers for the Bond issue.

About MTR CorporationMTR logo

MTR Corporation is regarded as one of the world’s leading railway operators for safety, reliability, customer service and cost efficiency. In its home base of Hong Kong, the Corporation operates nine commuter railway lines, a Light Rail network and a high-speed Airport Express link on which more than 5.5 million passenger trips are made on a normal week day. Another 5 million passenger trips are made on the rail services it operates outside Hong Kong in the Mainland of China, the United Kingdom, Sweden and Australia. In addition, the Corporation is involved in a range of railway construction projects as well as railway consultancy and contracting services around the world. Leveraging on its railway expertise, the Corporation is involved in the development of transit-related residential and commercial property projects, property management, shopping malls leasing and management, advertising media and telecommunication services.

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