Dongfeng Motor to issue 3-bln-yuan 3-year notes

Shanghai, September 10 (Gasgoo.com) Dongfeng Motor Group Co Ltd, the largest listed auto company in China, announced today that it will issue three-year notes of 3 billion yuan ($439.3 million) in the interbank market on Sept. 17, China Knowledge reported.

This batch of notes will be issued at face value and the coupon rate will be determined during the process of book building, the company said in a statement.

The notes will become tradable on Sept. 22. The proceeds from the issuance will be used to replenish working capital, optimize financial structure and lower financing costs. 

China Chengxin Credit Rating Co has rated the notes and the issuer AAA and AAA, respectively. Industrial & Commercial Bank of China and China CITIC Bank have been designated as the main underwriters for the sale.

Dongfeng's notes issuing plan comes after Bank of China announced earlier this year to quit Dongfeng Peugeot Citroen Auto Finance Co., Ltd., a 50-25-25 joint venture among Bank of China Group Insurance, Dongfeng Peugeot Citroen and PSA Finance Netherlands.

As China's third-largest carmaker, Dongfeng Motor Group has raised its 2009 sales target by 18% to 1.3 million vehicles on encouraging sales of its passenger vehicles amid the government's economic stimulus measures.