THE Hong Kong Monetary Authority has announced that the tender for the second issue of Mass Transit Railway Corp (MTRC) notes will be held next Wednesday. The five-year notes, amounting to $500 million and maturing on November 9, 2000, will carry interest at the fixed rate of 7.3 per cent, payable semi-annually. The MTRC notes issue is the second tranche of the MTRC Note Issuance Programme in which the monetary authority is acting as the arranger, custodian, agent and operator. The MTRC notes, denominated in lots of $50,000, will be cleared through the Central Money Markets Unit and will qualify as eligible securities for repurchase agreements under the Liquidity Adjustment Facility, a discount window operated by monetary authority. The first tranche of notes in May this year was over-subscribed 2.86 times. MTRC finance director Roger Moss said: 'The spread between MTRC notes and Exchange Fund notes has since narrowed from 66 to about 50 basis points. 'We believe the second issue will help to increase liquidity of our paper and maintain investor interest.' The MTRC will use the proceeds for general working capital, debt refinancing and other requirements. Monetary authority chief executive Joseph Yam said: 'I expect the issue will be well received by the market, given the growing reputation of MTRC internationally and the good performance of the first issue of MTRC five-year notes.