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The debt market has longed been playing a crucial role in the capital market of most developed countries. Issuance of debt securities can provide large corporations with long-term fund, using reasonable price. It also provides investors a choice, beside bank saving, with value-added prospect and lower risk when comparing with stock. As in international financial center, Hong Kong is famous for its maturity of various financial institutions. Our stock market rank eighth in the world in terms of market capitalization; foreign exchange turnover has the number five ranking. We also have a large banking sector with 80 out of the top 100 banking institutions in the world setting up representation offices or branches here. However, one important element of an international financial center, the debt market, seemed to be not existed at all before 1990. A number of impediments can be identified, namely the unfavorable tax treatments for corporate bonds, deficiencies in the benchmark yield curve and debt issuance and listing framework, narrow investor base, restrictive credit rating requirement and low secondary market liquidity. The continuous surplus of the Hong Kong Government also made it unnecessary to issue government bonds. Hong Kong