Noble Group, the commodities supplier backed by China’s sovereign wealth fund, is marketing a benchmark sale of five- and 10-year bonds denominated in U.S. dollars, according to a person familiar with the matter.

The Hong Kong-based company told investors it may price the five-year notes to yield between 337.5 basis points and 350 basis points more than similar-maturity Treasuries, said the person, who asked not to be identified because the details are private. The 10-year notes may be priced at about a 387.5 basis- point spread, they said.

 

Benchmark typically means at least US$500 million ($612 million) and a basis point is 0.01 percentage point.

 

Noble hired JPMorgan Chase & Co. to help it sell senior notes to raise funds for general use, it said in a statement to the Singapore stock exchange today, without providing further details. The company last sold bonds in the U.S. currency in October, when it raised US$1.25 billion from 10-year notes, according to data compiled by Bloomberg.

 

The extra yield investors demanded to hold the 6.75% bonds rather than Treasuries jumped 28 basis points to 370 basis points today, the biggest increase since May 25, according to BNP Paribas SA prices.

 

Noble shares fell 2.33% to $1.68 as of 3:06 p.m. in Singapore, and have declined by 20% this year.

 

Moody’s Investors Service is expected to rank the new debt Baa3, its lowest investment-grade rating, while Standard & Poor’s and Fitch Ratings will grade it an equivalent BBB-, according to the person. The company will have an option to buy the 10-year bonds back after five years, they said.