Russia's Rusal to offer bonds in China

Moscow-based United Company Rusal (0486.HK, RUSAL.EPA) is planning Russia’s first bond offering in China, Bloomberg reported. Rusal is the world’s largest aluminum producer, with two smelters in China. It has already raised US$2.2 billion in a share offering in Hong Kong in January and plans to boost Asian sales to 30% of total sales this year, up from 20% in 2009. Rusal and Wal-Mart Stores (WMT.NYSE) have both been inspired to seek bond issues in China following McDonald’s (MCD.NYSE) successful US$29 million bond issue in Hong Kong in August. However, as Rusal has no credit ratings, analyst Sergey Dergachev of Union Investment said Rusal bonds may need to offer 5.5 percentage points higher than McDonald’s 3% notes. He expects Rusal to sell at least US$100 million to attract foreign investors.