THE Mass Transit Railway Corp (MTRC) is issuing $200 million of dragon bonds, with Morgan Stanley International as the lead manager. The two year corridor floating rate note (FRN) issue was the first of its kind in Hong Kong dollars, the investment bank said. A floating rate note pays the coupon within a given range. Should this range be exceeded, the coupon is not paid. Under the terms of the MTRC issue, the coupon is 1.25 percentage points above the three month Hong Kong interbank offered rate. Morgan Stanley said a syndicate was being put together last night. ''There has been a positive response to the issue from Hong Kong and China along with investors around the world,'' a spokesman said.