MOSCOW (MRC) -- China Petroleum & Chemical Corp., which owns China's largest oil refiner, is planning to sell USD3 billion of bonds in four parts to refinance debt, according to a person with knowledge of the matter, reported Bloomberg.
The biggest portion of the financing for the state-owned energy company known as Sinopec Group will be USD1 billion of three-year bonds that may yield 1.2 percentage points more than similar-maturity U.S. Treasuries, said the person, who asked not to be identified because the information is private. The longest part would be USD400 million of 30-year bonds that may yield 4.25%.
Despite low oil prices Sinopec will benefit from its "very high strategic importance to China as the country’s largest refiner in terms of crude distillation capacity," according to a note published Monday by Moody’s Investors Service. The ratings company graded the notes Aa3, the fourth-highest ranking.
Yields on dollar bonds sold by high-grade Asian borrowers have fallen from a more than two-year high of 3.6% in December to 3.12%, Bank of America Merrill Lynch indexes show.
As MRC informed before, in October 2015, Sinopec Corp announced that it was in advanced talks on taking a controlling stake in petrochemical firm Dragon Aromatics, which operates one of the country's biggest chemical plants. The discussions come after the independent petrochemical firm suffered a second major fire in less than two years at the USD3 billion plant in Fujian and sources said local authorities want Sinopec to participate before allowing the plant to reopen.
Sinopec Corp. is one of the largest integrated energy and chemical companies in China. Its principal operations include the exploration and production, pipeline transportation and sale of petroleum and natural gas; the sale, storage and transportation of petroleum products, petrochemical products, coal chemical products, synthetic fibre, fertiliser and other chemical products; the import and export, including an import and export agency business, of petroleum, natural gas, petroleum products, petrochemical and chemical products, and other commodities and technologies; and research, development and application of technologies and information.
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