TNAG-1610-FCO40-22132-Minutes-and-Hansards-of-the-Legislative-Council-of-Hong-Kong-1987 — Page 247

Sir,

SPEECH BY THE HONOURABLE THE FINANCIAL SECRETARY IN LEGISLATIVE COUNCIL: WEDNESDAY 8 APRIL 1987

I move the motion standing in my name in the

Order Paper.

2.

Section 12 of the Mass Transit Railway

Corporation Ordinance requires the authority of the

Legislative Council for the Financial Secretary, on behalf

of the Government, to grant guarantees in respect of the

repayment of loans and other indebtedness incurred by the

Corporation.

3.

Authority is now sought for government

guarantees to be granted free of charge for financing

instruments issued by the Corporation, up to a total value

of HK$3,000 million, to replace its longer term government

guaranteed export credit debt obligations, which in turn

will be cancelled. The instruments will include floating

or fixed-rate loans with terms of between 2 to 9 years.

This switch to market borrowings will benefit the

Corporation because the replacement instruments will carry

lower interest rates and substantial interest cost savings

are expected. The Government will also benefit because

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/MTRC will replace