THE cheaper cost of borrowing in Hong Kong is luring Thailand's 10th biggest bank in terms of assets back to raise US dollars and take advantage of shrinking margins that have cut costs. Bangkok Metropolitan Bank Public Co is seeking US$100 million through a three-year floating-rate note (FRN) issue arranged by Fuji International Finance (HK). It is expected to be launched next Friday. The borrower would pay a coupon of 47.5 basis points (0.475 percentage point) over the six-month London interbank offered rate (LIBOR), said Jessie Leung, Fuji International's assistant manager of capital markets. The all-in yield would be about 60 basis points (0.6 percentage point), she said. The minimum denomination would be $500,000 each and the FRNs would not be listed. Bangkok Metropolitan Bank's pricing reflects a steady fall in borrowing costs for some Asian borrowers. In Bangkok Metropolitan Bank's latest deal, its margin is more than one-third less than the 0.75 percentage point over six-month LIBOR it had to pay for a three-year FRN last year. Bankers have been wooing Thailand because of its outstanding economic fundamentals and improved sovereign credit rating - it was upgraded late last year - and non-Thai banks want access to the country's retail market. One example of falling pricing is First Bangkok City Bank, which last year issued a $250 million floating-rate certificate of deposit, then the largest offshore debt issue by a Thai bank. First Bangkok paid 50 basis points (0.5 percentage point) over six-month LIBOR for that five-year deal, but is seeking 0.35 percentage point over six-month LIBOR for a $300 million five-year issue in the market now. Bankers have accused some financial institutions of lowering standards in an attempt to gain business in Thailand and other restricted-access markets.