Henderson Land among firms completing interest-rate swaps based on the onshore loan prime rate, HSBC says
Companies in Hong Kong moved swiftly on Monday to take advantage of a new Swap Connect rule that lets them hedge using China’s onshore loan prime rate (LPR), as demand rises to manage yuan interest-rate risks.
The introduction of the one-year LPR as a floating reference-rate option provides a benchmark more closely aligned with mainland China’s lending market, helping offshore corporate treasuries manage yuan exposures. The rate is most commonly used in pricing corporate and household loans. The other reference rates Swap Connect supports are the seven-day repo and the three-month and overnight Shanghai interbank offered rates.
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