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Fonterra Raises $800 Million Capital In Less Than A Week

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Feb 5 NZPA - The nation's biggest company, Fonterra Co-operative Group, says its $NZ300 million 6-year bond issue has been oversubscribed by 267 percent.

Preliminary terms for the issue, mainly targeted at retail investors, were announced only on Monday, offering the higher of a 7.75 percent coupon or 340 basis points over the swap rate on March 9.

Today the company said there had been a firm allocation of $800 million to NZX participants and institutional investors. The minimum investment level is $5000.

The offer of senior unsecured bonds received applications "significantly in excess" of the proposed $300m. Rated A+ by Standard and Poors and AA- by Fitch, the issue was announced as accepting an unlimited amount of oversubscriptions.

Fonterra chief executive Andrew Ferrier said the company was pleased. "We've had a great response from the New Zealand investor base, which reflects the confidence people have in Fonterra and our business."

ANZ and Bank of New Zealand are jointly leading the offer and the co-managers are ABN AMRO Craigs Ltd and First NZ Capital Securities Ltd.

Fonterra has said it will use the proceeds for general purposes. The cooperative is reported to be stockpiling product waiting for international prices to recover. It has said its inventory levels are no worse than usual, but in the past few months the cooperative has approached food companies in a search for additional warehouse space.

Fonterra is unlisted but is the nation's largest company and controls about a third of the world's dairy export trade. It generates more than 7 percent of New Zealand's gross domestic product. NZPA WGT kca gt

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