Friday, 13 March 2009

Korea's Posco Considers Bond Offering When Market Conditions Improve

Posco, the South Korean steelmaker that recently privately-placed $550 million in bonds to fund its Brazil investments, is considering selling debt again in international capital markets. The company mandated Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc., HSBC Holdings Plc. and Merrill Lynch & Co. -- yes the guys with the bonus problems -- to arrange a road show with investors between March 16-18. A bond transaction should be launched following the roadshow, subject to market conditions, according to a good source. The modality (senior unsecured, guaranteed, terms, duration, etc.) is yet to be defined. My understanding is that the bonds won't be offered in the U.S. -- therefore they will have FSA registration or will be listed in Luxembourg. We will keep you updated.

Posco placed the yen-denominated bonds in December to a group of investors led by Japan's Sumitomo Mitsui Financial Group -- which ended up being the sole buyer of the Samurai bonds with a three-year maturity.

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