Part of the Facility Structuring & Terms Guide — view the full guide
The headline rate on a Hong Kong dollar stock loan is only half the story. The other half is the benchmark under it: how often it resets, and what moves it.
This note explains what HIBOR is and who publishes it, how the spread over it is agreed, the choice between a fixed rate and a reset, why HIBOR can move sharply, and how Hong Kong dollar pricing compares with US dollar loans priced over SOFR. It quotes no rates, spreads or loan-to-value figures; terms vary by facility.
What is HIBOR and who publishes it?
HIBOR, the Hong Kong Interbank Offered Rate, is the estimated rate at which Hong Kong dollar deposits are offered to prime banks in the interbank market. It is published at 11:15 a.m. on every Hong Kong business day for eight tenors, from overnight to 12 months.
Its formal name is the HKAB HKD Interest Settlement Rates. The Hong Kong Association of Banks owns the benchmark, and the HKMA administers it, with the Treasury Markets Association running the daily process (HKMA: reform of interest rate benchmarks). A panel of 12 to 20 banks submits quotes; the highest three and lowest three are dropped and the rest averaged.
The tenors are overnight, one and two weeks, and one, two, three, six and 12 months. A Hong Kong business day excludes Saturdays and public holidays, and the rates appear on HKAB’s website at 11:15 a.m. (HKAB: HKD Interest Settlement Rates).
HIBOR is not being phased out. The HKMA has identified HONIA, the Hong Kong Dollar Overnight Index Average, as an alternative, but says "there is no plan to discontinue HIBOR". HONIA is an overnight rate built from actual unsecured interbank lending, so it has no term tenors of its own.
How is the spread over HIBOR set?
By negotiation, facility by facility. The spread is agreed with the lender alongside the advance, tenor, recourse and covenants, and it varies by facility; this note gives no figures.
In practice, lenders weigh the same things that shape the rest of the facility: the quality and liquidity of the shares, the size of the loan against them, the tenor, and whether the loan has recourse to the borrower beyond the shares. That is market practice rather than a rule, and each lender weighs the factors differently.
The HKMA has described how banks set Hong Kong dollar lending rates in general: they take into account funding supply and demand, interbank and other reference rates, and their own funding costs (HKMA inSight, 6 October 2026). That describes bank lending broadly, not stock loans in particular.
The rate is one part of the cost of liquidity. Our comparison of liquidity options for HKEX shares sets a stock loan against a sale, margin financing and a collar.
Fixed rate or HIBOR reset: which suits a stock loan?
It depends on how much rate risk the borrower can carry. A fixed rate keeps the cost known for the period, while a HIBOR reset passes interbank moves through at each reset date, up or down.
A floating loan can reset against any of HIBOR’s published tenors, and the reset schedule is a term of the facility. A short reset tenor follows interbank rates closely; a longer one smooths the path but fixes whatever rate is set on each reset day.
The HKMA has repeatedly urged borrowers to manage interest rate risk. In October 2026 it said the public "should carefully manage interest rate risks when making property purchases, investments or other borrowing decisions".
Prepayment terms differ too. Break costs on a fixed rate and notice periods on a floating one vary by facility, so they belong in the term sheet discussion alongside the rate. Our note on longer-tenor and follow-on facilities covers how a multi-year term changes interest treatment.
Why can HIBOR move sharply?
Because under Hong Kong’s currency board, interest rates adjust automatically through interbank liquidity. When money flows out, the Aggregate Balance shrinks and Hong Kong dollar rates rise; when it flows in, the balance expands and rates fall.
Under the Linked Exchange Rate System, the HKMA undertakes to sell Hong Kong dollars to banks at HK$7.75 per US dollar and to buy them at HK$7.85. The Aggregate Balance, the sum of banks’ clearing account balances with the HKMA, expands or contracts as these undertakings are triggered (HKMA: how the LERS works).
The HKMA’s own commentary shows the effect. In May 2025, after the strong-side undertaking was triggered, it said short-term interbank rates "declined sharply" as liquidity expanded. In July 2025 it warned that once the Aggregate Balance settles near equilibrium, HIBORs "could respond more sensitively to changes in liquidity condition" (HKMA inSight, 11 July 2025).
Local demand matters too. The HKMA names new share offerings and seasonal factors, such as half-year closing and dividend payments peaking in May and June, as influences on the demand for Hong Kong dollar funding. A borrower on a short reset feels these moves quickly.
How does HKD pricing compare with USD loans priced over SOFR?
The benchmarks differ in kind. HIBOR is a panel-quoted, unsecured term rate known on the day it is set, while SOFR, which replaced US dollar LIBOR after June 2023, is a secured overnight rate.
The HKMA notes that Hong Kong dollar interbank rates "generally track their US dollar counterparts" under the Linked Exchange Rate System, but are also influenced by the local supply and demand for Hong Kong dollar funding. The two can therefore diverge for a time.
How a US dollar facility applies SOFR is set in its terms and varies by facility. Borrowing in US dollars against shares priced in Hong Kong dollars also adds currency risk; our note on multi-currency stock-backed facilities explains how that risk can shift the effective loan-to-value.
This article is educational and is not financial, legal or tax advice. It describes how benchmarks work and quotes no rates or spreads; the pricing of any facility is set in its own terms. Hong Kong Stock Loans acts as an arranger and introducer in collaboration with SFC-licensed counterparties.
At a glance
| Feature | Fixed rate | HIBOR-linked |
|---|---|---|
| Rate risk | The rate is known for the fixed period | Interbank moves pass through at each reset; the HKMA notes HIBOR can respond sharply to liquidity |
| Reset frequency | None during the fixed period | Set by the facility against a published HIBOR tenor, from overnight to 12 months |
| Prepayment | Break costs may apply; terms vary by facility | Notice periods and any costs vary by facility |
| Budgeting | Predictable interest cost for the period | Interest cost changes at each reset; the HKMA urges borrowers to manage interest rate risk |
Hong Kong Stock Loans
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