The 10-year bond, to be one of China's biggest corporate bond offers since the country reopened capital markets a decade ago, will be sold to domestic investors only. The bonds will pay floating rate interest annually.
The issue "will result in a saving of interest payments by the group," China Mobile chairman Wang Xiaochu said in a statement. The company will pay less than the 5.2 percent interest a year charged on the loan.
China Mobile borrowed 12.5 billion yuan (US$1.5 billion) from eight banks in October to help pay for seven provincial mobile networks bought from its parent. Five billion yuan comes due this month, with the remaining 7.5 billion yuan (US$906 million) due in November 2003.
With 105 million mobile phone subscribers at the end of last month, the world's most populous nation is set to overtake the US as the biggest wireless market in a few months. China Mobile had 51.6 million customers in 13 provinces as of March 20, and with its parent, China Mobile Communications Corp, controls more than three quarters of the market.
China Mobile will sell the bonds through wholly owned unit Guangdong Mobile Communication Co by July. The bonds be traded on the Shanghai Securities Exchange.
China International Capital Corp was hired to handle the sale. The bonds are guaranteed by both China Mobile and China Mobile Communications Corp.
China Mobile shares fell as much as 5.4 percent to HK$36.80 (US$4.72) and recently changed hands at HK$37.30 (US$4.78), a 1.7 percent decrease. The company's American depositary receipts fell 4.7 percent to US$23.93 overnight.
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