BANK of Tokyo International (Hong Kong) has wrapped up a successful $1.2 billion bond deal, making it the first Japanese bank to qualify for the liquidity adjustment facility (LAF) operated by the Hong Kong Monetary Authority. The bank yesterday signed the $1.2 billion floating-rate certificate of deposit (FRCD) issue launched earlier this month and arranged by HSBC Markets. The deal reportedly sold well, with the two lead managers keeping $170 million each, making the sell-down 72 per cent, according to Asian credit newsletter Basis Point . In all, 16 banks participated in the issue. An FRCD is an issue of debt securities in which investors in the securities are paid a floating rate of interest - in this case, a coupon of 0.25 percentage points over the Hong Kong interbank offered rate. LAF eligibility makes FRCDs or floating-rate notes more desirable because holders can engage in repurchase deals with the Hong Kong Monetary Authority. This means they can sell the debt securities to the authority after agreeing to buy them back at an agreed price and date, allowing the investor more flexibility in managing liquidity. Apart from government debt securities, qualifiers for the LAF include issues by Wharf (Holdings), Sun Hung Kai Properties, Hongkong Bank, Standard Chartered Bank, and Bangkok Bank. Bank of America (Asia) has applied for LAF access for its FRCD, as has US bank Merrill Lynch for its $1 billion issue. Merrill Lynch is the only American qualifier for the facility because Bank of America (Asia) is registered as a Hong Kong entity. Also qualifying is the Mass Transit Railway Corp's $1 billion note-issuance facility signed in January 1995.