BP may sell yuan-denominated bonds
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BP Plc may join other foreign companies to sell yuan-denominated bonds as it seeks to diversify funding channels to cover costs of the Gulf of Mexico oil spill.
Gary Admans, the British company's manager of debt capital markets, told a forum in Paris that BP is considering debt sales in yuan, Japanese yen as well as Australian and Canadian dollars, Bloomberg News reported yesterday.
BP is selling assets to help cover the costs, up to US$40 billion, stemming from the worst oil spill in the United States.
Last month, BP agreed to sell its 60 percent stake in Argentina-based Pan American Energy to Bridas Corp, half-owned by Chinese offshore oil producer CNOOC, for US$7.06 billion.
BP has sold assets worth about US$21 billion this year.
The nascent market for yuan bonds in Hong Kong has received a number of thumbs-up from multinational companies in the past months.
US-based construction equipment maker Caterpillar Inc last month sold 1 billion yuan (US$150.1 million) of two-year notes with a 2 percent coupon, while McDonald's Corp in August sold 200 million yuan of 3 percent notes.
The central government deregulated the market early this year to let foreign firms issue yuan-denominated bonds through Hong Kong.
Yuan bonds in Hong Kong have been in short supply as holders of Chinese currency assets hope to find channels that could provide steady returns.
Robust demand is also driving down borrowing costs for issuers.
