State Power is planning a four billion yuan (about HK$3.75 billion) bond issue to raise funds for a 600 billion yuan capital-expenditure programme. The China Securities Journal reported that the bond issue would be launched next month or in May and offered to mainland investors. It said the issue would have three-year and five-year tranches and carry an annual coupon of 4.5 per cent to 4.7 per cent. Analysts believed the bond, to be underwritten by Citic Securities, formed part of State Power's spending programme in the next five years. Ingrid Wei, a Shanghai-based analyst of ING Baring Securities, said: 'I reckon the proceeds will be used to fund a huge capital expenditure on the corporation's power infrastructure.' State Power, which owns about half the country's 300,000 megawatts installed capacity, plans to spend 300 billion yuan building power-generation assets and another 300 billion yuan on a power-distribution network in a five-year plan to 2007. Analysts said State Power might seek funding from disposing and listing of power assets and issuing debts and bonds. They said the disposals would be conducted in tandem with State Power's continued restructuring strategy.