Victoria Peak Ltd (VPL) is a listed company in Hong Kong with assets of $HK8.4 billion and a debt-to-asset ratio of 0.60. Currently, VPL has a long-term bank financed multi-currency debt facility that represents 65% of its total debt and a HK dollar short-term bank overdraft facility for the remaining 35% of debt. At present, both facilities are only partially drawn. VPLs capital policy requires that there should be sufficient revenue available from each of the countries used in the multi-currency facility to cover any drawings.

VPL is considering raising a further $HK1.2 billion via the public debt market (i.e. bond issuance) but is concerned about the possibility of funding risks that may arise as a result of such issuance. You are engaged as a consultant by VPL and have been requested to advise on the following:

1. Apart from liquidity, interest rate and foreign exchange risk, identify and explain TWO other types of funding risk to which VPL would be exposed. In relation to each identified risk, suggest and describe appropriate methods of managing the risk.
2. Assume that VPL currently has a public issuer credit rating of A- from both Standard & Poors and Fitch. Any new public debt issuance would need to be rated before it can be issued. Discuss the process for obtaining a public issuance rating and identify the attributes of the issuance that you would expect to be assessed by the ratings agencies.
3. Identify and discuss THREE reasons why VPL should give consideration to funding their debt using international, rather than domestic, markets.