Hong Kong & China Gas plans to sell dollar bonds

HONG KONG, July 24 (Reuters) - Hong Kong and China Gas (0003.HK), also known as Towngas, is aiming to sell dollar bonds in one or more tranches, in what could mark a revival in debt sales following a fall in new Asian issuance volumes this month.

The sale would come following several weeks of intense volatility in global markets that has scared off potential Asian issuers from offering new bonds.

Towngas said it had not determined the size or tenor of the intended notes, according to a filing made to the stock exchange late on Wednesday.

The producer and gas distributor will meet investors in Hong Kong and Singapore on Friday, followed by stops in London on Tuesday, according to a source with direct knowledge of the plans.

Towngas will also meet U.S. investors from Monday to Wednesday, the source said, declining to be identified because he was not authorised to talk to the media about the plans.

The company may issue bonds following those meetings, subject to market conditions, the source added. HSBC (HSBA.L) (0005.HK) and Morgan Stanley (MS.N) will arrange the presentations.

Moody's Investors Service assigned on Thursday a first-time rating of A1 to the issuer and the proposed notes, while Standard & Poor's assigned an A-plus rating for what it said would be senior unsecured fixed-rate notes.

Both ratings are four notches below the top investment grade.

Towngas' proposed bonds come amid a slump in debt sales from Asian issuers this month following uncertainty caused by the U.S. government's bailout package for mortgage lenders Fannie Mae FNM.N and Freddie Mac FRE.N, as well as the failure of U.S. lender IndyMac Bancorp Inc IDMC.PK.

Asian issuers have sold $1.3 billion in G3 bonds, or those denominated in dollars, euros and yen, so far this month, which compares to the $6 billion sold in June and the $2.1 billion for the whole of July in 2007.

Among the deals seen this month, Philippine conglomerate SM Investments sold $350 million in five-year bonds on July 10.

-- For Moody's statement on Towngas bonds, see [ID:nWLA6755]

-- For S&P's statement on Towngas bonds, see [ID:nWNA3164] (Reporting by Rafael Nam; Editing by Anne Marie Roantree)