Nine Dragons prices $300 mln 5-yr bonds-term sheet

HONG KONG, April 23 (Reuters) - China's Nine Dragons (Holdings) Ltd (2689.HK: Quote, Profile, Research, Stock Buzz) sold $300 million in five-year bonds at a yield of 8 percent, matching guidance provided earlier this week, according to a term sheet obtained by Reuters.

China's largest paper board producer sold the bonds on Tuesday at a spread of 505.2 basis points over U.S. Treasuries, within the guidance of around 500 basis points in an earlier term sheet.

Nine Dragons holds a "BBB-" rating, the lowest investment-grade level, from both Standard and Poor's Ratings Services and Fitch Ratings.

The firm will add 100 basis points to the coupon of 7.875 percent should it be downgraded by either of the ratings services, and a total of 200 basis points should it be downgraded below "BB", or two notches below "BBB-".

Merrill Lynch (MER.N: Quote, Profile, Research, Stock Buzz) was the sole underwriter for the deal. (Reporting by Rafael Nam; Editing by Keiron Henderson)