Aluminum Corp. of China Ltd., the nation’s largest maker of the metal, said its board approved a plan to sell debt securities on China’s interbank market.
Total outstanding debt instruments, including 22 billion yuan ($3.32 billion) of short-term paper and medium-term bills already sold, won’t exceed 47 billion yuan after the new sales, the company, known as Chalco, said in a statement to the Shanghai stock exchange. The types and terms of the debt issues have yet to be decided, Chalco said.
Chalco is stepping up investments in overseas production, including copper assets in Peru and an iron-ore project in Guinea via its publicly traded unit. Standard & Poor’s affirmed the company’s BBB+ foreign currency long-term credit rating last month, while assigning a “negative outlook,” citing excess capacity in the industry, as well as the acquisition in Guinea, a “deviation” from the company’s core strategy.
The company’s bonds tumbled in the past three months, sending yields on the 4.5 percent yuan-denominated notes due in 2017 up 98 basis points, or 0.98 percentage point, to 5.04 percent, according to data compiled by Chinabond, the nation’s biggest debt clearing house. The notes returned 3.9 percent this year, compared with the average gain of 2.8 percent of Chinese companies, according to Bank of America Merrill Lynch’s China Corporate Index.
