The Hong Kong dollar debt market saw a record amount of new issues last year. Total issuance in the domestic market was $63.64 billion, up 36 per cent from 1995, according to industry newsletter Basis Point. The previous record was $54.38 billion, in 1994. Paul Smith, executive director for debt markets at Union Bank of Switzerland, said the Hong Kong dollar market was boosted by falling interest rates in the United States. Fixed-rate issues almost doubled last year, totalling $20.45 billion. A large chunk of that total was issued by supranationals such as the World Bank. Supranationals launched six $1 billion deals eligible under the Hong Kong Monetary Authority's liquidity adjustment facility (LAF). LAF eligibility also boosted the floating-rate market, which saw issues increase 20 per cent to $43 billion. Banks were the only source of floating-rate paper last year. Major issues in the floating-rate market were a $4.75 billion deal by Hongkong Bank and a $4 billion deal for Bank of China. Colin Blackwell, head of syndication at Merrill Lynch, said the gains were investor driven. He said Hong Kong quasi-government institutions, such as the Land Fund and the Housing Authority, were major customers of fixed-rate paper, while banks eagerly snapped up floating-rate notes to gain LAF eligibility. Mr Smith said uncertainty over US interest-rate direction could slow the Hong Kong dollar debt market this year.