Hanson in pounds 813m US financing operation

HANSON yesterday announced a financing operation in the US in which it sold dollars 1.25bn ( pounds 813m) of guaranteed notes to pay off short- term debts.

The move failed to raise the usual excited flurry of interest in Hanson's motives because analysts said it was probably not directly related to any big new acquisition.

Geoff Allum, of NatWest Securities, said the issue indicated Hanson believed interest rates in the US had bottomed out. The financing, through Hanson Overseas BV, is a combination of short-term notes maturing in 1996 at a highly competitive interest rate and medium-term notes maturing in 2003, which lock in low interest rates for a decade.

The issue is the first US long-term public debt offering by Hanson, which has been active in the US commercial paper market for the past two years.

The company has been in talks with Santa Fe Pacific about a gold mines-for-coal swap worth dollars 500m, in which Hanson's Gold Fields Mining Corporation subsidiary would be swapped for Santa Fe's gold mines.

But Mr Allum said he expected that US activity would be confined to selling non-core businesses and making a few add-on acquisitions while waiting for the US recovery to come through. The US mining and other businesses are poised to benefit substantially from a cyclical upturn in demand.

Mr Allum said that in the UK the opposite was the case, with two thirds of the business in tobacco and the rest in construction, where there was no great prospect of cyclical recovery.

He believed the UK was the likelier place for a large acquisition, particularly as the largest part of the group's cash mountain of pounds 8.4bn in the last accounts was in sterling.

Mark Cusack, of BZW, did not believe the market was reading anything into the dollars 1.25bn announcement beyond the refinancing of short-term debt.

The dollars 500m of 1996 notes yield 5.592 per cent at maturity, and the dollars 750m of notes due in 2003 are priced to yield 7.451 per cent.