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Fonterra plans NZ$300 mln bond issue in February

Posted in News January 28, 2009 - 11:43am, Alex Tarrant

Fonterra CEO Andrew Ferrier said that the dairy giant was planning a NZ$300 million bond issue with unlimited oversubscriptions to be marketed in early February.

Ferrier was speaking on Fonterra's sky digital channel used to broadcast the announcement that Fonterra had revised its payout forecast for this season down to NZ$5.10/kg from its forecast of NZ$6.00 last year and last season's payout of NZ$7.66.

There had been talk since before Christmas that Fonterra would announce the bond issue to refinance some financial market borrowings and to reduce its debt levels.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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4 Comments

by Chris | 28 Jan 09, 12:09pm

Will a Fonterra bond issue

Will a Fonterra bond issue have about the same level of risk as a govt bond, but with double the interest rate? Surely John Key would never let Fonterra go down

by raf | 28 Jan 09, 3:07pm

It may well be "govt

It may well be "govt guaranteed" like a lot of stuff these days.

by Rob | 28 Jan 09, 4:28pm

I would think it would

I would think it would be unsecured, but who would invest in it in these times. Look at ING and ANZ, they can lose a lot of their clients moeny, yet they still survive, due to teh 'small print' in the terms of the investment.

by Iain Parker | 28 Jan 09, 4:29pm

A govt bond is well

A govt bond is well different to a public bond issue. A govt bond is certificate of indebtness swapped for the created credit of the central bankers. The bond being a contract to pay back the bogus loan with interest at an agreed time in the future out of the future taxes of the nation. These are normally traded among the worlds elite elements.
A public bond issue is normally offered by an entity whos normal lines of credit have dried up causing them duress. In issuing a public bond it is essentially borrowing money from the public and promising to pay it back with interest at a date in the future. To achieve this they must find an investment that will over the contracted period deliver earnings in excess of what they borrowed.