The supply of short-term inter-bank funding was tightened yesterday as banks prepared for huge settlement demands caused by three major initial public offerings, which close today. The initial public offerings for Beijing North Star, Zhejiang Expressway and Regent Pacific will close at noon. The listing candidates were expected to lock up a hefty $250 billion in the banking system. The one-week Hong Kong inter-bank offered rate rose seven-eighths of a per cent from 5.25 per cent in the morning to a day high of 6.125 per cent. Beijing North Star is offering 614.8 million shares at $2.62 each, of which 15 per cent - or 92.22 million shares - are available for public subscription in Hong Kong. With an expected over-subscription rate of 600 times, as much as $132.8 billion will be frozen in the banking system. Zhejiang Expressway is offering 1.24 billion shares for sale at $2.38 each, of which 10 per cent - or 124 million shares - are for public subscription. Another 118 billion shares will be locked up in the system assuming the offer is 400 times subscribed, as many analysts predict. Regent Pacific is offering 170.5 million shares for sale at $2.62 each, of which 25 per cent - or 42.6 million shares - will be allocated for disposal to the public. The grey market price of shares in Beijing North Star reached $4.20 yesterday, while Zhejiang's pre-trading price stood at $3. No grey market activity was noticed at Regent Pacific. Some smaller brokerages see their borrowing costs rising 25 basis points this week. They usually use bank funding to provide margin financing services for their customers. An official from a medium-size brokerage said some smaller brokers had asked for assistance because their existing credit lines were not large enough to satisfy explosive demand from so many customers.