Tue, May 15, 2012 - Page 11 News List

China Steel looks to issue longer duration bonds

By Kevin Chen  /  Staff Reporter

China Steel Corp (CSC, 中鋼) plans to adjust the duration of corporate bonds sold this year, as the nation’s largest steelmaker hopes to successfully refinance its debt.

The Greater Kaohsiung-based company yesterday said in an e-mailed statement its board had approved a plan to extend the duration of bonds to a period of between five and 10 years, from between three and seven years it set previously, to cope with future fund demand.

On Dec. 28, the board agreed to sell as much as NT$20 billion (US$677.9 million) in bonds in Taiwan this year to enhance its working capital. The sale of non-collateralized bonds will reach maturity in three to seven years with a yield of less than 2 percent, CSC said at the time.

The company’s refinancing needs came as domestic interest rates remain relatively low compared with levels seen prior to the 2008 global financial crisis. However, CSC yesterday remained mum on a possible date for the bond issue or its pricing.

At yesterday’s meeting, the directors of the board also signed off on the management’s report on first-quarter performance — CSC recorded a net loss of NT$323 million in the first three months of the year, or a loss per share of NT$0.05, on a consolidated revenue of NT$93.93 billion.

The company said that with the adoption of new accounting standards, the International Financial Reporting Standards (IFRS), its total assets increased by NT$6.54 billion to NT$618.22 billion as of Jan. 1, while total debt also expanded by NT$9.18 billion to NT$308.76 billion on a consolidated basis. Shareholders’ equity dropped by NT$2.64 billion and net value decreased by NT$0.16 per share, it added.

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