Fonterra says it has raised A$300 million (NZ$388.3 million) through its first corporate bond issue in Australia with the proceeds to be used to refinance back debt in Australia.
The bonds are for a five-year term, maturing in July 2016 and were priced at a spread of 100 basis points over the swap rate.
Stephan Deschamps, Fonterra's general manager of treasury, said the bonds were expected to carry an A+ credit rating from Standard & Poor’s and AA- from Fitch, consistent with the current ratings on Fonterra itself.
“Fonterra has a large business in Australia and it makes sense for us to seek a greater alignment between our funding activities and our asset base,” Deschamps said.
“Fonterra has not participated in the Australian dollar corporate bond market previously and we are pleased with the strong demand from institutional investors.”
The Aussie offer comes just a fortnight after Fonterra entered the Chinese currency bond market, raising 300 million yuan (about NZ$56 million) through an issue of renminbi denominated bonds. That offer was nearly six times oversubscribed and will pay investors' interest of just 1.1% per annum, the lowest coupon achieved yet for an international corporate issue in the Chinese yuan deliverable in Hong Kong denominated bonds market.
Fonterra's Australian offer was managed by ANZ and Westpac.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.