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To: Ibexx who wrote (42880)	9/30/1999 12:18:00 AM
From: Ruffian	Read Replies (1) \| Respond to of 152472

Wonder what they will do with the money?>. China Telecom Plans $500 Million Bond Sale on October 20 By Aaron Sheldrick at Bloomberg News 28 September 1999 China Telecom (Hong Kong) Ltd., the only publicly listed company that owns cellular telephone networks in China, plans to sell bonds for the first time, starting October 20, people familiar with the transaction said. The company aims to sell $500 million of 10-year bonds priced to yield about 2.2%age points more than U.S. Treasuries with a similar maturity, the people said. Company officials at China Telecom - a Hong Kong listed company controlled by China's Ministry of Information Industry - said financing plans are not "concrete" and declined further comment. Any sale by China Telecom - which needs about $3 billion to make acquisitions in each of three provinces where it doesn't already own networks - will be closely watched by money managers and other Hong Kong and Chinese companies. They will also be looking at the level of government support for the company in its first ever attempt to borrow funds from abroad. "It would be a prime issue for China. The role of the authorities in guaranteeing the issue, or not, as the case may be would also be critical in terms of its acceptance" said Christopher Tinker, head of Asian fixed-income research at Credit Lyonnais SA in Hong Kong. A price of 2.2%age points more than U.S. Treasuries would value the bonds close to the rate of China's government bonds. China's 10-year U.S. dollar government bonds now yield about 1.9%age points more than U.S. Treasuries. Traders said China Telecom may have to pay more, probably a premium of between 2.6 and 2.75%age points over U.S. Treasury bonds, to reflect the lesser status of the borrower. "If you wander down below the government level - it's the government, China Development Bank, Bank of China and Citic (China International Trust & Investment Corp.) - beyond that you're on your own," said Steve Taran, managing director, global head of sovereign research at Salomon Smith Barney. That said, "we are more interested in the absolute yield than the premium to the sovereign," said Dominique Audin, a senior portfolio manager at Equitilink Ltd., which manages about $750 million in Asian bonds. Still, while some investors may balk at this price, portfolio managers said the company's bonds would likely be a staple in any regional fixed-income portfolio because of the company's size and its dominance in China's mobile telephone industry. China Telecom has the third-highest weighting in Hong Kong's Hang Seng Index, accounting for 10.5% of the benchmark measure. It's the No. 1 cellular provider in the three provinces where it already has networks. Merrill Lynch & Co. and Chase Manhattan Corp. are arranging the sale. The company may hire an additional two banks to help sell the securities, bankers said. China Telecom is also preparing a sale of up to $2 billion worth of new shares, arranged by Goldman, Sachs & Co. and China International Capital Corp., people familiar with that sale said. That transaction, which was first scheduled to coincide with the bonds sale, will probably be postponed until next year because of other similar sales scheduled to come at the same time. Copyright 1999, Bloomberg L.P. All Rights Reserved. World Trade e-commerce plan gaining momentum Applications by the ton as Germany opens floodgates for broadband wireless access 'Careful' Globalstar set to tiptoe into satellite market U.S. uses WTO threat to challenge Japanese pricing Telia plans new network for international growth CI's silver anniversary review of its coverage Titans & visionaries share their scenarios of 2024 Satellite and subspace slug it out for broadband Data warehousing helps mine for gold Using bundled services to compete © EMAP Media 1999