Bloomberg News

Sinopec Sells $3 Billion Debt, First in Dollars Since ‘96

May 10, 2012

China Petrochemical Corp., the state- owned petroleum explorer known as Sinopec Group, sold $3 billion of debt in its first dollar-denominated bond sale in more than 15 years.

The company issued $1 billion portions each of 2.75 percent five-year debt to yield 205 basis points more than similar- maturity Treasuries, 3.9 percent 10-year bonds with a 210 basis- point spread and 4.875 percent 30-year securities to yield 185 basis points more than benchmarks, according to data compiled by Bloomberg.

Sinopec is the fifth Chinese gas company to sell dollar bonds this year after borrowers in Asia issued a record amount of dollar-denominated debt in April while seeking funds to expand in the world’s fastest-growing region amid a drop in global sales. Cnooc Ltd. (CEO:US), China’s largest offshore oil producer, sold $2 billion of 30-year notes April 25, the biggest such offering by a Chinese company in more than a year, Bloomberg data show.

Sinopec last sold dollar bonds in 1996, when it issued a $200 million convertible note through Sinopec Zhenhai Refining & Chemical Co., Bloomberg data show. The company has about 218 billion yuan ($34 billion) of debt outstanding. Proceeds from the sale will be used for general corporate purposes in its international businesses and to fund overseas expansion, according to marketing materials obtained by Bloomberg News.

China National Petroleum Corp., Beijing Enterprises Holdings Ltd. and China Resources Gas Group Ltd. have also raised U.S. currency debt in 2012, Bloomberg data show.

China’s energy use increased at the fastest pace in four years in 2011 as consumption of natural gas jumped 12 percent and crude-oil use rose 2.7 percent, the statistics bureau said in February.

Citigroup Inc., HSBC Holdings Plc, BOC International Holdings Ltd., Barclays Plc, Goldman Sachs Group Inc., JPMorgan Chase & Co., Mizuho Securities Co. and UBS AG managed the sale, Bloomberg data show. Moody’s Investors Services is expected to rate the securities Aa3, its fourth-highest grade.

To contact the reporter on this story: Charles Mead in New York at cmead11@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net


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