LDK Solar Co., the Chinese solar-panel maker, sold 500 million yuan ($79 million) of three-year domestic bonds at 6.8 percent, six times less than the yield of its international bonds, according to a person familiar with the matter.
Xinyu, south-central China-based LDK’s notes were priced at 24 basis points above the official bank lending rate. Similar-rated notes yield 6.23 percent, according to Chinabond, the nation’s bond clearing house. LDK’s three-year international yuan bonds that are settled in U.S. dollars yield 49.5 percent, Bloomberg data show.
The U.S. Commerce Department is investigating accusations that China’s solar-equipment industry gets unfair state aid such as cash grants, raw-materials discounts and preferential loans, which could lead to import tariffs on their products of 100 percent.
The Chinese government has set the growth of the nation’s alternative-energy companies as a national development goal and said it will boost investment in the industry, giving domestic banks that lend to the companies a measure of insurance.
LDK has registered to sell 3 billion yuan of medium-term notes, bonds sold on the country’s interbank market and regulated by the central bank, according to the prospectus for today’s sale. The bond and the company were rated AA by Shanghai Brilliance Credit Rating & Investors Service Co.
China’s banks, most of which are state-owned, held 62 percent of medium-term notes as of the end of October according to Chinabond.
— With assistance by Pavel Alpeyev, and Henry Sanderson