Fonterra Raises Us$165 Million In Us Debt Market
Fonterra Co-operative Group Limited has raised US$165 million (NZ$280 million) in a private placement of long-term debt
to US institutional investors.
The issue of 12-year senior, unsubordinated notes, maturing August 2015, closed on Tuesday 5 August (New York time).
Fonterra Chief Financial Officer Graham Stuart said the placement was more than four times oversubscribed, and was
accepted by investors on very favourable terms. As a result of the strong investor demand the issue was increased from
US$125 million (NZ$212 million).
"The success of the placement reflects the confidence of overseas investors in Fonterra's business strategy and
outlook."
Mr Stuart said the placement does not mean Fonterra has acquired extra debt.
"This issue completes the extension of our debt maturity profile following the formation of Fonterra. We have now
reduced our reliance on short-term borrowing to a more prudent and conservative mix of medium and long-term borrowing."
The notes were swapped to 28.5 basis points above US LIBOR (the US floating rate benchmark). This equates to a 38.25
basis point margin over NZ BKBM (Bank Bill floating rate benchmark). Mr Stuart said Fonterra had reduced debt by NZ$330
million over the past year and refinanced more than NZ$2.3 billion in the past 15 months as it reshaped its debt
portfolio towards longer-term debt.
The placement was managed by Deutsche Bank.