The dairy company says the bond offer will open with an indicative margin of 0.75% over and above a base rate. The bonds are being offered to New Zealand institutional and retail investors and will mature in October 2021. (See a terms sheet for the offer here).
Proceeds of the offer are for general corporate purposes, it said.
Fonterra has $150 million of March 2016 bonds that carry a coupon of 6.83% and were last quoted at a yield of 3.9% and $35 million of perpetual notes that pay 5.59% 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.»
Source: NBR