The government's introduction of new tax incentives for bonds has provided a timely boost for the Airport Authority's second retail bond issue, according to authority chairman Victor Fung Kwok-king. The four tranches to be launched today include a three-year Hong Kong dollar note with a 2.3 per cent coupon, a two-year Hong Kong dollar note extendable for two years with a 2.7 per cent coupon, a three-year US dollar note extendable for two years with a 2.95 per cent coupon and a seven-year Hong Kong dollar note with a 4.3 per cent coupon. The authority plans to borrow about HK$500 million from the public. 'The timing [of the bond issuance] couldn't be better, following the financial secretary's announcement in the budget last week of tax incentives for Qualifying Debt Instruments such as the authority's retail bonds,' Mr Fung said. Under the government initiative, the seven-year bond will be tax free. Any gains on trading three and five-year bonds will be subject to half the normal profits tax. Bank of China (Hong Kong), Bank of East Asia, Dao Heng Bank, HSBC and Standard Chartered are the underwriters of the bonds. The tranches have a minimum issue of HK$50 million each.