Low rates spur firms to borrow

Hong Kong companies raised US$5.38 billion through 22 deals in the first quarter, reflecting active corporate borrowing to take advantage of the low interest rate environment.

Basis Point , an Asian debt market publication, said the amount, 6.4 per cent lower than the US$5.75 billion raised in the same period last year, belied a more buoyant syndicated loan market.

Last year's figure was distorted by a number of airport-related financing deals. Notable among those was the HK$8.8 billion financing by the Airport Authority.

This year, the interest margin was reduced as lending banks became more comfortable with 'Hong Kong risk'.

'Lots of banks have tried to offer financing on very attractive terms,' said Stewart Man, spokesman for basiSfield, the database from which Basis Point drew its information.

Fierce competition among banks helped push down corporate borrowing costs.