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Fonterra declares successful Australian bond issue
Last Updated(Beijing Time):2011-07-05 11:07
The world's biggest dairy company, New Zealand-based Fonterra, Tuesday announced it had raised 300 million AU dollars (320.61 million U.S. dollars) through its first ever issue of corporate bonds in Australia.

The bonds, for a five-year term, maturing in July 2016, were priced at a spread of 100 basis points over swap, said a statement from Fonterra, a farmer-owned cooperative, best known for its Anchor-brand products.

The bonds were issued by an Australian subsidiary guaranteed by Fonterra Co-operative Group Ltd., and were expected to be rated A+ by Standard & Poor's and AA- by Fitch, consistent with the agencies' current ratings for Fonterra Co-operative Group Ltd., said the statement.

Fonterra general manager treasury Stephan Deschamps said the bond proceeds would be used to refinance bank debt in Australia.

"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," he 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 Australian bond issue comes just a fortnight after Fonterra entered the Chinese currency bond market, raising 300 million yuan (42 million U.S. dollars) through an issue of Renminbi-denominated bonds in Hong Kong.

"The strong interest in both of these recent bond issues demonstrates how Fonterra's business profile and financial strength are well regarded by international investors," Deschamps said.

Fonterra is the largest processor of milk in the world, producing more than two million tonnes of dairy ingredients and products every year, and employs 16,000 people.

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