To: Frank Ellis Morris who wrote (123681 ) 5/11/1999 7:50:00 AM From: Mohan Marette Respond to of 176387
<--OT-->I guess this is out of the question as an investment then? *CHINA DEVELOPMENT BANK, formerly known as the State Development Bank, a Chinese government-controlled lender, plans to price $500 million in 10-year global bonds today at about 11 a.m. New York time, said bankers familiar with the sale. Merrill Lynch & Co. and Salomon Smith Barney are joint book-runners and lead arrangers for the sale, which is likely to yield about 280 basis points more than U.S. Treasury bonds of comparable maturity. While the China Development Bank had considered selling both five and 10-year bonds, investors preferred the longer maturity, said the bankers. While yields of existing Chinese sovereign bonds have been generally stable following mass demonstrations in China in reaction to the bombing of the Chinese embassy in Belgrade over the weekend by North Atlantic Treaty Organization aircraft, bankers say the market's reaction is being closely watched. Bankers say the bonds have already attracted more than $500 million in demand, though the size of the sale is unlikely to be increased beyond $500 million. China Development Bank filed documents with the U.S. Securities and Exchange Commission to sell as much as $1 billion in debt securities. The bank is rated ''Baa1'' by Moody's Investors Service Inc. and ''BBB+'' by Standard & Poor's Corp. The bonds were today rated ''Baa1'' by Moody's. While the bonds aren't explicitly guaranteed by China's central government, they carry a ''liquidity maintenance agreement,'' which says the People's Bank of China -- China's central bank -- will make capital contributions if the issuer is not able to make bond payments.