Cnooc Slashes Costs as Foreign Banks Vie to Lend: China Credit

Cnooc Ltd., working to complete the biggest overseas takeover by a Chinese company, is slicing borrowing costs by 80 percent as it attracts international lenders seeking exposure to government-backed businesses.

The country’s largest producer of offshore crude oil agreed to pay $15.1 billion in July to buy Canada’s Nexen Inc. and is seeking $6 billion in bank debt to finance the transaction. It’s offering 80 basis points over the London interbank offered rate for the 12-month loan, on which banks have been asked to respond this week. That’s 487 basis points less than China’s 6 percent benchmark lending rate and 332 below the average 4.45 percent Cnooc pays on its bonds.