The Airport Authority Hong Kong (AAHK) is looking to secure a syndicated loan of around HK$20 billion (US$2.6 billion), according to sources familiar with the situation.

This comes just months after the authority completed one of the largest bond issues by a local entity.

The statutory body of the Hong Kong government has recently issued a request for proposals to banks for the loan, which is expected to take the form of a five-year revolving credit facility, the sources said.

Furthermore, AAHK aims to reduce its borrowing costs through this new financing deal. The funds raised will be used to refinance a HK$35 billion syndicated loan maturing in June and to support working capital needs.

The earlier loan had financed Hong Kong’s three-runway system project, which was initially expected to be completed by the end of 2024 but has since been delayed until at least the end of this year, Bloomberg reports.

The sources noted that discussions are still underway and the terms of the loan may be subject to change.

Meanwhile, Hong Kong’s aviation industry is showing early signs of recovery following its post-COVID struggles. Hong Kong International Airport (HKIA) was recently recognised as the world’s busiest cargo airport for 2024, handling 4.9 million tons last year, according to an announcement from the authority on Monday.

In addition, local airline Cathay Pacific Airways Ltd. reported a modest increase in full-year profit for 2024, driven by sustained strong demand for passenger travel and solid cargo performance.

AAHK’s planned loan also coincides with the ongoing HK$100 billion expansion of Hong Kong International Airport, which includes the development of two marinas as part of broader initiatives to revitalise the city’s sluggish economy.

Roughly HK$30 billion of the infrastructure spending will be financed directly by the airport, while the remainder is expected to come from private sector investment, according to an earlier Bloomberg News report.

Back in January, AAHK raised approximately $7 billion equivalent through a multi-currency bond sale, one of the largest ever by a Hong Kong-based issuer.