UPDATE 1-POSCO says to sell $463 mln bonds to refinance debt

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SEOUL, July 18 (Reuters) - South Korea's POSCO (005490.KS: Quote, Profile, Research, Stock Buzz), the world's No.4 steelmaker, said on Friday it would issue 468.8 billion won ($463.2 million) in overseas debt to refinance maturing exchangeable bonds.

In 2003, POSCO sold 51.6 billion yen ($478.4 million) of bonds exchangeable into 1.7 million shares of SK Telecom (017670.KS: Quote, Profile, Research, Stock Buzz) owned by POSCO.

The bonds were exchangeable into SK Telecom shares at 304,890 won apiece, far above the current share price of 178,000 won.

POSCO said on Friday the new 5-year bond offering worth 49.3 billion yen would be made to investors in Asia and Europe.

Analysts expect POSCO to sell more bonds later this year, as the steelmaker has said it is interested in bidding for Daewoo Shipbuilding and Marine Engineering (042660.KS: Quote, Profile, Research, Stock Buzz), which will be put up for sale by its top shareholders in the second half.

The planned sale of a 50.4 percent stake in the world's third-largest shipbuilder could be the country's biggest M&A transaction this year, fetching around $3.6 billion, based on the Daewoo's market value of 7.3 trillion won.

Shares in POSCO closed down 4.3 percent at 488,000 won, as Asian steel shares followed a tumble in their U.S. peers.

Shares in U.S. steel firm Nucor Corp (NUE.N: Quote, Profile, Research, Stock Buzz) dropped 11 percent on Thursday after the company issued a weaker-than-expected forecast for the third quarter. [ID:nN17275991] ($1=107.84 Yen) ($1=1012.1 Won) (Reporting by Miyoung Kim; editing by Keiron Henderson and Jonathan Hopfner)