China's Chalco to issue, reissue up to RMB 47 billion debt instruments

By Marisa Wong

Madison, Wis., Jan. 13 - Chalco Aluminum Corp. of China Ltd. plans to issue debt financing instruments totaling up to RMB 47 billion in the inter-bank bond market in one or several tranches, according to a notice from the company's board of directors.

Chalco said it already issued RMB 10 billion of one-year bonds in 2010, but it plans to conduct a reissuance of these short-term bonds upon their repayment in 2011.

Chalco also issued RMB 12 billion of medium-term notes, of which RMB 5 billion are due in June 2011. The company intends to reissue these notes upon their repayments.

According to the notice, Chalco will apply for an additional RMB 25 billion of debt financing instruments. The exact type and amount are yet to be determined.

The company said it will fix the issuance rate of the debt financing instruments at a rate lower than the interest rates of bank loans.

Proceeds will be used for replenishing working capital and replacing the company's bank loans, thus controlling the size of the company's total debt and minimizing finance costs.

The proposed issuances are subject to approval at a general meeting to be held on Feb. 28.

Chalco is a Beijing-based metals manufacturer.

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