Yanzhou Coal Hires Deutsche Bank, UBS for Securities Sale

Yanzhou Coal Mining Co. (1171) plans to meet with bond investors from today to discuss a possible sale of dollar-denominated subordinated notes with no fixed maturity.

The Shandong-based miner’s securities will be issued by a wholly-owned unit and guaranteed by Yanzhou Coal, it said in a statement to the Hong Kong stock exchange yesterday. Proceeds will be used for debt repayment, capital expenditure, working capital and general corporate purposes, the miner said.

Moody’s Investors Service assigned a provisional Ba2 rating to Yanzhou Coal’s possible offering, two steps below investment grade, according to an e-mailed statement today. Fitch Ratings expects to give the securities an equivalent BB grade, it said separately.

The perpetual securities “will provide additional funding to Yanzhou Coal for the purposes of managing its business in a down-cycle,” Alan Gao, a senior analyst at Moody’s, said in the statement.

Yanzhou Coal hired Barclays Plc, Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc. and UBS AG (UBSN) to arrange the proposed issue, according to its stock exchange filing. The sale amount, terms and conditions haven’t been set, the company said.

To contact the reporters on this story: Vinicy Chan in Hong Kong at vchan91@bloomberg.net; Kristine Aquino in Singapore at kaquino1@bloomberg.net

To contact the editor responsible for this story: Stanley James at sjames8@bloomberg.net

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