MISC Issues Bonds To Buy Ships

Malaysian International Shipping Corp (MISC), the country's flag carrier, is planning to issue yankee bonds worth up to $500 million in the next few weeks. The yankee bond offering, where the debt is issued in the U.S. market, will be the second from Malaysia this year. Traders said state power firm Tenaga Nasional would issue $800 million in bonds by the middle of next month, with the company expected to go on a roadshow soon. "MISC is looking to raise $350 to $500 million to finance ship acquisitions," said a dealer at a foreign bank. But another source said the shipping line could be tapping a maximum of $400 million. The MISC issue was seen as likely to precede a similar issue by its parent Petronas. The state oil firm owns 62 percent of MISC. Both sources said MISC could be borrowing under Petronas' name to enjoy better rates. "MSIC is borrowing based on Petronas credit," said a Singapore-based trader. Moody's Investor Service Inc in October upgraded the long-term debt rating for global bonds, yen bonds and notes of Petronas to Baa2 from Baa3. Its rating outlook was stable. Petronas was considering tapping global funds to help finance its oil exploration projects in Chad and Sudan, traders said. Tenaga is expected to use the money raised in its offering to refinance its debts. - (Reuters)