Citic Raises $1B 7-year Bonds for Kazakhstan Field Purchase

Citic Resources Holdings Limited announced that Citic Resources Finance (2007) Limited has issued US$1 billion 7-year bonds to finance the purchase of a Kazakhstan oilfield.

The lead managers of this bond issue are Bear Stearns and Morgan Stanley. The bonds, which will be due on May 15, 2014, were priced at 99.726 cents to a dollar to yield 6.8%. The expected ratings by Moody's and Standard and Poor's are Ba2 and BB, respectively. Details of the terms are as follows:

--Issuer: Citic Resources Finance (2007) Limited
--Guarantor: Citic Resources Holdings Limited
--Security: Senior unsecured
--Expected ratings: Ba2 (Moody's), BB (Standard and Poor's)
--Size: US$1 billion
--Maturity: May 15, 2014
--Price: 99.726
--Coupon: 6.75%
--Yield: 6.80%
--Spread: +214.6 basis points to Benchmark Treasury
--Benchmark UST: 4.750% UST due May 15, 2014
--UST Spot/Yield: 100-18 1/4/4.654
--Optional redemption: Make Whole at UST +50bps
--Trade: May 14, 2007
--Settlement: May 17, 2007
--Interest payment date: Each May 15 and November 15, commencing November 15, 2007 (Short 1st Coupon)
--Denoms: $200Kx$1K
--CUSIP: 144A-17311KAA1/ Reg S-G21555AA8
--ISIN: 144A-US17311KAA16/Reg S- USG21555AA88
--Form: 144A/Reg S/NY State Law/Exp Sing Listing
--Covenants: 1. $101 Change of Control; 2. Mandatory Acquisition Redemption; 3. Expropriation Redemption
--Features: Make-Whole Call, Optional Tax Call, Equity Clawback

Mr. Kwok Peter Viem, Chairman of Citic, said, "We are pleased to announce that the bonds issued have received overwhelming response from investors, with more than 5 times oversubscription. The yield was lower than the market expectation, indicating a very strong demand. After the completion of the bond issue, the capital strength of the Company will be further enhanced. The capital will be used to purchase 50% of Kazakhstan oil assets from the parent company, so as to maximize the returns to shareholders."

Citic Resources Holdings Limited (Stock code: 1205 HK) has been listed on the Hong Kong Stock Exchange since 1997. Citic Group is the parent company of Citic Resources with majority stake of about 55%. Citic Resources positions itself as an integrated provider of key commodities and strategic natural resources, with particular focus in the oil business. The principal activities of Citic Resources and its subsidiaries are in the fields of oil, aluminum, coal, import and export of commodities, and manganese.


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