CNOOC, working to complete the biggest overseas takeover by a Chinese company, is slicing borrowing costs by 80 per cent as it attracts international lenders seeking exposure to government-backed businesses. In July, the country's largest producer of offshore crude oil agreed to pay US$15.1 billion to buy Canada's Nexen and is seeking US$6 billion in bank debt to finance the transaction. It is offering 80 basis points over the London interbank offered rate for the 12-month loan, on which banks have been asked to respond this week. That is 487 basis points less than China's 6 per cent benchmark lending rate and 332 below the average 4.45 per cent CNOOC pays on its bonds. "Ultra-high-grade Chinese companies like CNOOC make strategic acquisitions from time to time, and can always easily achieve very competitive loan pricing," said Joe Cheung, a vice-president at the Credit Suisse Asia-Pacific emerging markets financing group in Hong Kong. "Having government ownership and policy support also makes international banks comfortable and confident to lend." Overseas takeovers by Chinese companies have climbed 19 per cent to US$60.4 billion this year as borrowing costs fall. CNOOC is looking offshore for cheaper funds, as global lenders vie for business with some of the world's most active acquirers. "Now that state-owned enterprises in China are stepping on to the world stage there are more opportunities for international banks to build relationships with them," said David Yim, the head of debt capital markets in Hong Kong at Royal Bank of Scotland. CNOOC, which has a Aa3 rating from Moody's Investors Service, is seeking oil reserves to meet demand in the world's second-biggest crude-consuming nation. Average use of the fuel in China leapt 90 per cent in the decade to last year. Buying Calgary-based Nexen will hand CNOOC control of assets in the North Sea, the Gulf of Mexico and in Nigeria, as well as oil-sands reserves in Canada, where it already produces crude in a joint venture.