AT&T of the USA Issues US$1.3 B.of Bonds in Taiwan

American telecom, AT&T Inc., issued US$1.295 billion in international bonds on Nov. 10 in Taiwan, causing buzz across the market for being the single highest capital raising on record.

According to chairman of GreTai Securities Market, Soushan Wu, the bond issuance shows Taiwan's  emerging global status for capital raising, and that by the end of this month another significant multinational corporation will issue bonds in Taiwan.

AT&T's bond issuance follows another foreign telecom  Verizon Communications Inc., which issued bonds on September 23 this year.

Wu, citing comments from the investment banks that underwrite  AT&T's bond issuance in Taiwan, says the telecom chooses Taiwan for the island meets its need in spreading risk and ease, efficiency for raising capital.

The AT&T bond has 30-year maturity with annual yield of 4.7% and redemption by the issuer after two years of interest payment. With AT&T being rated A by the  S&P, its bonds are available to  institutional investors, which must  register transaction settlements with European settlement banks Euroclear and Clearstream.

According to Taiwan's industry executives, long-term bonds issued by creditworthy organizations like AT&T are attractive to investors especially when U.S. dollar is strengthening.

Wu says in Taiwan bonds are particularly popular with insurers for yields from bonds are not taxable and not subject to  45% ceiling on total investment spending, and that the AT&T bonds yield 0.3 percentage point higher than the U.S. Treasury's 30-year bond. (KL)