Fonterra to benefit from decades-low interest rates in sale of $150m of 7-year bonds
The cooperative said it's considering an issue of senior fixed-rate bonds with a maturity date of March 2023.
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Fonterra Cooperative Group [NZX: FCG], the world's biggest dairy exporter, stands to benefit from the lowest borrowing benchmarks in at least two decades in selling $150 million of seven-year bonds ahead of a debt maturity next month.
The Auckland-based cooperative said it's considering an issue of senior fixed-rate bonds with a maturity date of March 2023, the proceeds of which would go towards general corporate purposes, Fonterra said in a statement. The sale would be ahead of a $150 million maturity of Fonterra bonds paying annual interest of 6.83 percent on March 4.
The seven-year swap rate, a benchmark for corporate borrowing, was recently at 2.97 percent, near the lowest level in at least 20 years.
Low interest rates have made corporate debt issues more attractive as a means to raise money. Spark New Zealand and Auckland International Airport have both sold bonds about 1 percentage point above the swap rate.
Fonterra appointed ANZ New Zealand as arranger and lead manager of the sale and Deutsche Craigs as co-manager.
(BusinessDesk)
Paul McBeth
Wed, 17 Feb 2016
Wed, 17 Feb 2016
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Fonterra to benefit from decades-low interest rates in sale of $150m of 7-year bonds
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