A South Korean bank was active in the Hong Kong debt market yesterday, with Hanil Bank mandating Chase Manhattan Asia to arrange a $500 million floating rate certificate of deposit (FRCD). The 364-day issue carries a coupon of 30 basis points over the Hong Kong interbank rate (Hibor), and 17 basis points over the London interbank rate (Libor). Hanil Bank had a Moody's rating of A3, a Chase Manhattan official said. The facility will be swapped into US dollars, and the deal should be completed in about a month. An official said: 'We expect the placement will be well received. There is a growing appetite for Korean paper.' Debt-market sources said the pricing was a little low but thought its limited life span and South Korea's impending entry into the Organisation for Economic Co-operation and Development would help bring in customers. An official at a US merchant bank said: 'There is very little risk involved in a one year products, that is what probably justifies the narrow spread.' He said three-year Korean paper of similar quality had carried a spread of about 28 basis points over Libor.