Fonterra cuts retail bond offer by NZ$150 million

Fonterra cuts retail bond offer by NZ$150 million
Fonterra has cut the size of its new 6 year bond offer by NZ$150 million to NZ$100 million, saying it was able to raise money on international money markets at a "very attractive funding cost" to help pay for a maturing 300 million euro bond. The offer will be open for 15 days from February 18 and Fonterra will accept up to NZ$50 million in over-subscriptions. It expects to announce the interest rate offered next Wednesday (February 17). The bond has an A+ credit rating from Standard and Poor's and the minimum investment size is NZ$5,000. Last February Fonterra announced plans for a NZ$300 million retail bond offering 7.75% over six years. It was swamped by demand from 'Mum and Dad' investors and expanded it to NZ$800 million, as we reported on February 5 last year. Fonterra announced plans for this year's offer in January, indicating then it would be for up to NZ$250 million. Fonterra's farmer shareholders bought NZ$270.7 million of extra shares in late January, less than a third of those up for sale. The prospectus for the retail bond offer is here. Watch an investing report about this story our video page here. Watch on YouTube here. Here is a full release of the statement from Fonterra below:
Fonterra Co-operative Group Limited announced today that it is offering up to NZ$100 million of bonds, with the ability to accept up to NZ$50 million oversubscriptions. The Offer will open on Thursday 18 February 2010 and will close on 3 March 2010. The unsecured fixed rate senior bonds will have a six year maturity (to 4 March 2016). The minimum investment is $5,000 and multiples of $1,000 thereafter. The interest rate for the bonds will be announced on Wednesday 17 February, the day before the Offer opens. A Simplified Disclosure Prospectus for the offer has been registered and is available for download at Fonterra.com Applications for bonds will not be accepted until the Offer opens. Fonterra has mandated ANZ, part of ANZ National Bank Limited; BNZ; and Westpac Institutional Bank, a division of Westpac Banking Corporation, as Joint-Lead Managers for the bond Offer. On 20 January 2010, Fonterra announced it was considering a bond offer of up to $250 million. The offer size has been scaled back to a maximum of $150 million as Fonterra has been able to cover part of its financing requirements overseas at a very attractive funding cost . As previously advised, Fonterra intends to use any money raised for general business purposes, including partial replacement of a €300 million Euro Medium Term Note (EMTN) maturing in April 2010

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