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Fonterra mulls $250M bond sale, third issue for NZX debt market

07 Apr 2015

Fonterra Cooperative Group, the world's biggest dairy exporter, may sell $250 million of six-year bonds in what would be its third security listed on the NZX debt market.

The Auckland-based dairy company would sell the bonds, expected to mature in October 2021, to New Zealand institutional and retail investors. Proceeds would be for general corporate purposes, it said.

Fonterra has $150 million of March 2016 bonds that carry a coupon of 6.83 percent and were last quoted at a yield of 3.9 percent and $35 million of perpetual notes that pay 5.59 percent annual interest.

ANZ New Zealand has been hired as arranger for the sale and joint lead managers are ANZ, Bank of New Zealand and Westpac Banking Corp. The company will release details of the bond offer next week, it said.

Last week Standard & Poor's affirmed Fonterra's A and A-1 credit ratings, with a stable outlook. S&P said the company's rating reflects its "business position as a low-cost, leading global dairy co-operative, together with the group's significant financial flexibility provided by the effective subordination of milk payments to its New Zealand supplier base."

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