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By Bloomberg

China Petrochemical Corp. and Beijing Enterprises Holdings Ltd. are planning to sell euro-denominated bonds as non-European companies seek to benefit from tumbling borrowing costs in the region.

China Petrochemical, Asia’s largest oil refiner known as Sinopec Group, will sell three- and seven-year bonds Tuesday, according to a person familiar with the offering, who is not authorized to speak publicly and asked not to be identified. Beijing Enterprises hired banks for investor meetings starting April 23 for its debut sale in the single currency, a person familiar with the deal said.

The Chinese companies are joining U.S. borrowers including Coco-Cola Ltd. in capitalizing on demand for corporate debt from investors who’ve seen euro-area yields quashed amid unprecedented central bank stimulus. The average yield on investment-grade debt in euros was 0.88 percent Monday, compared with 2.87 percent for equivalent dollar-denominated securities, according to Bank of America Merrill Lynch index data. The rate reached a record-low 0.85 percent on March 10.

“It’s definitely a trend and there’s no doubt we will see more,” said Geraud Charpin, a London-based money manager at BlueBay Asset Management, which oversees more than $65.8 billion. “If it makes sense for a U.S. company, why wouldn’t it make sense for a Brazilian, Russian or Chinese company?”

Yield Premium

China Petrochemical is issuing the bonds through Sinopec Group Overseas Development (2015) Ltd. The three-year notes will pay a yield premium of about 50 basis points to 55 basis points above benchmarks and the seven-year securities will pay a premium of about 80 basis points, according to a separate person familiar with the matter.

The company sold its debut euro bonds in October 2013. The 550 million euros of debt yielded 105 basis points above the benchmarks. The average spread over benchmark demanded to hold investment-grade debt in euros was 69 basis points Monday, Bank of America Merrill Lynch index data show.

Among overseas borrowers raising funds in Europe this year, China Construction Bank sold 500 million euros of five-year bonds and Berkshire Hathaway Inc. sold 3 billion euros of securities. Coca-Cola’s was the biggest-ever sale by a U.S. company in the single currency, raising 8.5 billion euros.