(Updates with bond’s guarantee in fourth paragraph.)
Oct. 28 (Bloomberg) -- Daejeon Riverside Expressway Funding Plc reduced the relative yield it is offering investors on a sale of Samurai bonds planned for Nov. 2, according to a person with direct knowledge of the matter.
The company told investors it plans to price the one-year notes to yield between 190 basis points and 200 basis points more than the benchmark yen swap rate, said the person, asking not to be identified as the information is private. Daejeon had planned to pay as much as 210 basis points, the person said on Oct. 26.
Daejeon Riverside also plans to sell two-year bonds at a spread of between 200 basis points and 210 basis points more than the benchmark, and five-year notes at a spread of between 220 basis points and 230 basis points, the person said. The terms are due to be set on Nov. 2, the person said.
The bonds will be issued by the Dublin, Ireland-based special purpose company funding the construction of an expressway in Daejeon, South Korea, according to an Oct. 25 filing with Japan’s finance ministry. The city will guarantee the bonds, the statement said.
Sales of Samurai bonds by Korean borrowers more than tripled this year to a record 370 billion yen ($4.9 billion) from the same period a year ago as offerings from European issuers plunged amid the sovereign debt crisis, according to data compiled by Bloomberg.
Proceeds from the Daejeon Riverside sale will be used to repay 13 billion yen of 3.85 percent Samurai bonds maturing on Nov. 15, the finance ministry filing said.
Mitsubishi UFJ Morgan Stanley Securities Co. is helping the company with the sale, it said. Samurai bonds are yen- denominated debt sold in Japan by overseas borrowers. A basis point is 0.01 percentage point.
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