Posco ready to price dollar bond deal

Posco, South Korea's largest steelmaker and the world's fourth biggest, plans to raise a minimum of $500 million from the sale of five-year senior global US dollar bonds, and could price the deal as early as Thursday evening, New York time, according to banking sources.

The transaction would mark the first US dollar bond offering from an Asian corporate this year, and the first since the $1 billion issue by Hong Kong and China Gas in July 2008.  

The company completed a two-day roadshow yesterday, during which one team of representatives and advisers visited Singapore, Hong Kong and London, and another met investors in Los Angeles, New York and Boston.

The issue is likely to yield around 9.5%, say sources -- higher than initial price talk of closer to 9%, and a hefty premium for a company rated A1 by Moody's and single-A by Standard & Poor's. Posco's 5.875% bonds due in 2016 were last trading at around 9%, and its five-year credit default swaps are quoted at 330bp.