UPDATE 1-PCCW to place up to US$750 mln in bonds on Weds
11/6/2001 9:11:00 PM
HONG KONG, Nov 7 (Reuters) - Pacific Century Cyberworks (0008) , Hong Kong's dominant telecoms carrier, plans to place a bond on Wednesday worth up to US$750 million, according to ratings agencies Standard & Poor's and Moody's and sole arrangers JP Morgan.
The private placement offering, revealed by the ratings agencies on Tuesday in New York, is intended to raise funds to pre-pay part of the US$4.7 billion in bank debt incurred from the company's purchase last year of Cable & Wireless HKT.
Market sources said the 10-year issue will be priced at a spread of 350 to 360 basis points over comparable U.S. treasuries.
"We are in the process of completing the transactions. It should be completed today," a JP Morgan official, who asked not to be identified, told Reuters.
JP Morgan said it is the sole arranger of the issue.
A spokeswoman for PCCW, which earlier this year withdrew a planned US$2.5 billion bond offering when market conditions soured, declined comment.
According to a press release issued by Standard & Poor's, PCCW also plans to prepay an additional US$750 million of the bank loans using its own cash reserves by the end of this year, thereby largely paying off the US$1.5 billion three-year loan tranche that comes due in 2004.
S&P said it had assigned an investment grade BBB rating to the unsecured bonds, which are guaranteed by PCCW's core PCCW-HKT Telephone Ltd unit. Moody's said it assigned the notes an investment grade Baa1 rating.
Shares in PCCW, headed by 34-year-old tycoon Richard Li, were unchanged on Tuesday at HK$2.10, and are up 7.7 percent over the past three months, but down 65 percent over the last year.
The shares have been weighed down in part by PCCW's debt level, as well as investor disfavour towards the telecoms and Internet sectors.
Last month, PCCW issued a 30 billion yen (US$250 million) 30-year bond in a private placement.
REUTERS
Rtr 21:11 11-06-01 Copyright 2001, Reuters News Service
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