AU Optronics leads borrowers in Asia

AU Optronics Corp (友達光電), the nation's largest maker of flat-panel displays, was among companies borrowing last week to expand their businesses, taking advantage of low interest rates.

The company, the world's third-largest producer of liquid-crystal display screens, appointed Bank of Taiwan and 17 other lenders to help raise money with a NT$39 billion (US$1.2 billion) seven-year loan and a NT$6 billion five-year bond, bankers familiar with the transactions said.

AU Optronics is beefing up production of thin-film transistor LCD monitors with a NT$90 billion project in central Taiwan, as consumers shun glass-tube TV sets in favor of slimmer screens.

"Many companies are rushing to borrow money from banks because they believe interest rates have hit bottom," said Maxwell Chen, portfolio manager at Prudential Financial Securities Investment Trust Enterprise in Taipei. "The LCD industry is the hottest industry in Taiwan, so LCD makers may just as well raise funds now."

AU Optronics' loan will have a US$150 million-denominated piece and a NT$34 billion portion, and an interest margin of 58 basis points more than Taiwan's primary commercial-paper rate, the bankers said. The company signed a NT$35 billion loan in November, paying an interest margin of 63.5 basis points more than the commercial-paper rate, which was at 1.16 percent on Friday. A basis point is 0.01 percentage point.