S.Korea’s POSCO sets guidance on dollar bonds-source

      HONG KONG, July 12 (Reuters) - South Korea's POSCO (005490.KS), the world's fourth-biggest steel maker, has set guidance for its sale of five-year dollar bonds at 9.25-9.50 percent yield, a source with direct knowledge of the deal said on Thursday. No size for the deal has been announced, though sources with knowledge of the matter previously told Reuters POSCO was aiming to raise $500-$700 million. The sale is expected to price later in the day during U.S. hours, said the source on Thursday, declining to be identified because he was not authorised to talk publicly about the sale. The official guidance is in line with POSCO's indication to investors on Wednesday that it would aim to price the deal at around 9.375 percent. [ID:nHKG332212] POSCO's shares fell 0.8 percent as of 00025 GMT, underperforming a 0.5 percent gain in the main KOSPI index. The steel maker is the first Asia corporate outside the financial sector to sell a global bond this year, and its offering is viewed as a test of investor sentiment for debt from companies in the region. The intended yields are considered steep for a company with POSCO's credit rating, analysts said. However, they also reflect the premiums being demanded by investors to risk their capital -- especially for issuers from emerging markets -- as well as concerns about profitability in the global steel sector. POSCO is rated 'A' by Standard & Poor's, or the sixth-highest investment grade rating, and one notch above that at 'A1' by Moody's Investors Service. [ID:nWNA8857] [ID:nHKF080004] Citigroup (C.N), Deutsche Bank (DBKGn.DE), Goldman Sachs (GS.N), HSBC (HSBA.L) (0005.HK), and Merrill Lynch are underwriting the sale.