The Airport Authority will next month sign a $5 billion note issuance programme with the Hong Kong Monetary Authority which will enable it to raise debt with lower costs and longer maturity. The move follows yesterday's signing of a $4 billion three-year revolving facility with 32 financial institutions. Authority finance and commerce director Raymond Lai said the notes to be issued under the programme would be priced on a fixed interest rate basis. He said from the experience of the Mass Transit Railway Corp - which has also signed a similar programme with the authority - the funding cost could be as low as the equivalent of 10-15 basis points below the Hong Kong interbank offered rate for five-year debts. The authority intends to issue notes under the programme to raise cheaper funds to repay its existing debts, a move which would lower its overall interest expenses. The programme also enables the authority to issue notes with longer maturities, such as seven or 10 years. Mr Lai said this would lengthen the average maturity of the authority's debts, enabling it to be more flexible in finance planning. The authority plans to launch the first $500 million issue under the programme in December with a $1 billion issue early next year. He said the authority would ultimately seek a credit rating in a bid to tap debt markets in the United States and Japan. 'This will happen when we need more funding to construct new phases of the airport,' Mr Lai said. He said the authority would have another round of talks with the International Air Transport Association on the issue of fees for airlines at the new airport next month. He declined to confirm whether the authority had worked out a new proposal for the fee structure, only saying the association should be satisfied with the results.