On December 7, Baosteel Co., Ltd made an announcement, announcing it successfully issued $500 million foreign bonds. The issuance of dollar bonds was the first time for Baosteel Co., Ltd to use a wholly owned overseas subsidiary Bao-Trans Enterprise as the main body to issue bonds directly and adopted the liquid supporting commitment provided by Baosteel Co., Ltd together with concurrent innovative trading structure of maintaining a good agreement.
On November 29, Baosteel Co., Ltd started to issue overseas dollar bonds. For this transaction, three big international credit rating agencies including Standard & Poor's, Moddy's and Fitch rating respectively granted Baosteel Co., Ltd an A-, A3 and A- long-term credit rating, with a stable outlook. Besides, it granted the planned issuing dollar bonds of Bao-Trans Enterprise an A-, Baa1 and A- rating, fully reflecting the recognition and affirmation of international credit rating agencies on Baosteel Co., Ltd and the trading structure.
For the overseas issuance of dollar bonds, the management level of Baosteel Co., Ltd had the road shows in Singapore and Hong Kong respectively on December 2 and December 3. After two-day fruitful road shows, the representatives from nearly 90 international famous investment institutions were met. During the process of interacting with investors, management level of Baosteel Co., Ltd elaborately explained the innovative trading structure, company's highlighted credits and the planning of Zhanjiang Iron & Steel Base project, which expounded the perception of Baosteel Co., Ltd on the future trends of Chinese iron and steel industry as well as the medium and long-term development strategies of Baosteel Co., Ltd.
The bond trades triggered the strong responses from 136 global professional investment institutions, aggregately receiving $2.2 billion orders. Among them, Asian investors accounted for 85%, and European investors took up 15%. In terms of different types of investors, fund companies accounted for 65%, central banks and insurance companies occupied 16%, banks took up 16% and private banks accounted for 3%.
Finally, Baosteel Co., Ltd successfully issued $500 million and five-year debenture bonds with 3.75% coupon, maturity time being December 12, 2018 and paying interests on a semi-annual basis. Innovative trading patterns and methods of promoting credits not only enabled Bao-Trans Enterprise gain the similar credit rating with Baosteel Co., Ltd, but also ultimately significantly lowered the costs of issuing bonds compared with general modes of maintaining good agreements, achieving a great success. It is known that bonds will be listed on Hong Kong Stock Exchange.
