Hong Kong Dollar Bond Sales Skyrocket as Borrowing Costs Shrink

Bond sales in Hong Kong dollars surged in the second quarter as issuers rushed to raise funds after currency interventions in the city drove down short-term borrowing costs to nearly zero.

Hong Kong dollar bond issuance jumped to a record HK$1.28 trillion ($163 billion) in the April to June period, according to Bloomberg data going back to 1988. The bond sales were up about 20% from the previous quarter.

The Hong Kong Monetary Authority flooded the market with cash in May to cool the local currency’s rally, a move that dragged down the one-month borrowing rate to as low as ...