June 27 (Bloomberg) -- MISC Bhd., the world's biggest owner of liquefied natural gas tankers, postponed a planned dollar- denominated bond sale because of fluctuations in debt yields sparked by losses linked to U.S. subprime mortgages.

Kuala Lumpur-based MISC, a unit of Malaysian state-owned oil company Petroliam Nasional Bhd., hired Citigroup Inc. and Deutsche Bank AG to sell $750 million of 10-year bonds, an e-mail sent to investors earlier this week showed.

``Given the current market volatility, MISC has decided to put their transaction on hold pending more stable market conditions,'' according to an e-mail sent to investors today by one of the sale's arrangers.

Investors have increased their aversion to riskier investments on concern that losses at two hedge funds run by Bear Stearns Cos. could become more widespread. Credit-default swaps based on $10 million of debt included in the iTraxx Asia ex-Japan Index of 50 companies jumped to $15,750 yesterday, from $10,750 a week ago, according to Morgan Stanley.

``Increased event risk has caused some paring of risky asset positions and some bond issues have been pulled in this hostile climate,'' said Tim Condon, head of research for Asia at ING Groep NV in Singapore.

Rotterdam-based Arcelor Mittal, the world's biggest steelmaker, and US Foodservice, a unit of Dutch supermarket company Royal Ahold NV, postponed their bond sales yesterday.

Bad Bets

Hedge funds run by New York-based Bear Stearns made bad bets in the subprime mortgage securities market. The firm, the biggest U.S. broker to hedge funds, said yesterday it won't provide financing to one of the funds and plans to lend $1.6 billion to rescue the other, half as much as it offered last week.

MISC had sought to price its bonds as early as yesterday to yield about 40 basis points more than mid-swap rate. A basis point is 0.01 percentage point. The 10-year mid-swap rate was at 5.69 percent at 11:42 a.m. in Hong Kong.

The yield on the company's 6.125 percent bonds maturing in 2014 rose to 92 basis points more than Treasuries today, from 73 basis points a week ago, according to data provided by Deutsche Bank.

Standard & Poor's rates MISC's debt A-, the seventh-highest investment grade, while Moody's Investors Service ranks it one level higher at A2.

MISC owns 21 container ships, 13 chemical tankers, 45 oil tankers and 23 LNG carriers, according to its Web site. It has outstanding orders for a container ship, 11 oil tankers, eight chemical tankers and six LNG carriers, the site shows.

Credit-default swaps are financial instruments based on bonds or loans that are used to speculate on a company's ability to repay debt. The contracts, conceived to protect bondholders, pay the buyer face value in exchange for the underlying securities or the cash equivalent in a default.

To contact the reporter for this story: Patricia Kuo in Hong Kong at pkuo2@bloomberg.net.

Last Updated: June 27, 2007 00:45 EDT