Australia's BlueScope prices US$325 mln bond-source

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SYDNEY, June 11 (Reuters) - BlueScope Steel Ltd (BSL.AX),
Australia's largest steelmaker, has increased to US$325 million
and priced a private bond placement, two market sources said on
Wednesday.

The offer, initially announced with a size of US$150
million, comprised three maturities of seven, ten and 12 years.

The 10-year tranche was the largest piece with over US$200
million of notes and will pay a coupon of 6.71 percent or 275
basis points over U.S. Treasuries (UST).

The seven-year tranche will also pay 275 basis points over
UST, while the 12-year will pay 285 basis points over UST.

BlueScope has an unsolicited rating of BBB+ by Fitch.

Bank of America and Westpac Institutional Bank jointly
arranged the offer. Both declined to comment.

The U.S. private placement market has been a popular source
of funds for Australian corporations looking for long-dated
debt.

Australian corporations have raised over US$4 billion in
2007, making the country the fourth-largest issuer in the U.S.
traditional private placement market, according to Thomson
Reuters data.

BlueScope's rival, OneSteel Ltd (OST.AX), is also looking
to raise long-term bonds and has hired the same pair of banks
to arrange the offer.

The US$150 million placement is expected to price late this
week with maturities ranging from 7 to 12 years, a market
source said.

Typical buyers of traditional private placements are U.S.
insurance companies keen on long-dated paper to match their
liabilities.
(Reporting by Cecile Lefort)