Bonds News
- Sinopec issues bonds to level off rising interest rates
Date: 11-May-2007 Sources: (Xinhua Online)
Sinopec, Asia's largest refiner in terms of capacity, issued ten year's worth of corporate bonds, valued at 5 billion yuan (649 million U.S. dollars) on Thursday, amid concerns over rate hikes.
The bonds are priced in conformity with their face value. The National Development and Reform Commission (NDRC), who approved the issuance of the bonds, placed a statement on its website saying that domestically qualified institutional investors are allowed to purchase the bonds with an annual interest rate of 4.2 percent.
'Through issuing the bonds, the company is attempting to level off interest rates, amid concerns over [benchmark interest] rate hikes,' an unnamed Sinopec official was quoted as saying.
This is the second time Sinopec has issued mass corporate bonds. In January this year, the company issued bonds worth 10 billion yuan (1.3 billion U.S. dollars).
According to a company statement released on Wednesday, the proceeds from Thursday's bond offering will be used to finance a 65 billion yuan (8.4 billion U.S. dollars) cross-region gas transfer project.
Sinopec plans to invest 110.1 billion yuan (14.2 billion U.S. dollars) in capital investment in 2007. Of this, the oil giant is expected to invest 53 billion yuan (6.8 billion U.S. dollars) in exploration and production as it builds up its network for shipping natural gas from southwest Sichuan to industrial regions on the eastern coast.
According to Chinese law, a company can issue bonds worth no more than 40 percent of its net assets. Last year, the company's equity was valued at 255 billion yuan (33 billion U.S. dollars).
Sinopec's Puguang gas fields in Sichuan Province reportedly boast reserves of up to 356 billion cubic meters. The company is expected to participate in building a second cross-region natural gas pipeline next year.
Sponsor Results:
