Yanzhou Coal offers to buy back a combined US$300 million of two of its outstanding bonds

By CAROL CHAN

Yanzhou Coal (1171.HK) continues its effort to trim its expensive U.S. dollar-denominated debt by offering to buy back a combined US$300 million of two of its outstanding bonds. The two outstanding bonds, one due in 2017 and one due in 2022, have a total outstanding amount of US$884 million. For the 2017 bonds, the repurchase prices is 88%-93% of principal amount, while for the 2022 bonds, repurchase prices is 95%-100% of principal amount, depending on when the bond holders submit the tender. Lucror Analytics sees the tender offer as a sign of “positive capital management”. Yanzhou in December already repurchased US$115.6 million worth of 2022 bonds. Last month, the Chinese coal miner said it will redeem all its outstanding US$300 million US dollar perpetual bonds on May 23.