Bank of China (BOC) will return to the Hong Kong debt market, possibly as early as next week, for a $2 billion issue of five-year floating rate certificates of deposit. Bankers expect the offering from China's foreign exchange bank, which abruptly curtailed a similar issue last year, to be massively oversubscribed and possibly raised well beyond the figure set at the launch. One source said: 'Everybody will try to entertain this deal for the relationship element alone.' This will be BOC's first debt issue in the territory. Last year's planned issue was scrapped after the bank's rating was cut by Moody's Investors Service from A3 to Baa1. That deal was launched at $1 billion and subscribed to the tune of $6.2 billion, though the bank decided to keep the issue at $5 bil-lion. Bankers in Hong Kong were uncertain how much money the BOC would seek this time around. The State Administration of Exchange Control is believed to have approved BOC's fundraising, but no one in the market knows at what level the approval came. The deal that was launched - and closed - last year was cancelled after the Moody's downgrading invalidated documentation for the deal. The bank's paper was eligible for the Monetary Authority's Liquidity Adjustment Facility (LAF) until the Moody's downgrade, which put the paper just under the authority's criteria for a minimum single-A rating. LAF eligibility makes a debt offering more attractive because it can be used as collateral to borrow overnight funds. Most banks that had agreed to take last year's offering did not pull their support after the rating change, but the BOC opted to cancel the certificates, rather than rewrite the paperwork. A change in the rules should prevent any similar problems. The monetary authority recognised ratings from the Japan Bond Research Institute, which puts the BOC within the allowable range for LAF eligibility. Bankers said preliminary price talk was in the range of 40 basis points over the Hong Kong Interbank Offered Rate, nearly the same as similar deals by other note-issuing banks, Hongkong Bank and Standard Chartered. As with the rating, price may not be an issue for most potential investors in the bank's paper. One banker, speaking off the record said: 'The Bank of China could price it at 40 basis points under Hibor and people would still buy it.' Nor will timing make much of a difference, though market players said the bank had picked a good time to launch. Andrew Fung, head of capital markets Asia at Commonwealth Bank, said: 'The market for syndicated loans and fixed rate debt is very quiet at the moment. 'Most banks and corporates did their jumbo deals in the first half of the year.'