Fonterra's Australian bonds sold at 100bps over swap

Fonterra first A$300M sale of Australian bonds priced at 100bps over swap

July 5 (BusinessDesk) – Fonterra Cooperative Group, the world’s biggest dairy exporter, raised A$300 million in its first bond issue across the Tasman.

The dairy exporter sold the five-year bonds at 100 basis points over swap, as it continues to stretch its debt across different markets. That indicates a price of about 6.47%, based on today’s Australian five-year swap rate of 5.47%.

“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,” General Manager Treasury Stephan Deschamps said in a statement.

The sale comes two weeks after its successful sale of three-year bonds in Hong Kong, which pay annual interest of just 1.1%, the lowest coupon achieved for an international corporate issue of Chinese yuan deliverable in Hong Kong.

The Australian bonds are expected to be rated A+ by Standard & Poor’s and AA- by Fitch Ratings, in line with Fonterra’s debt rating.

(BusinessDesk)

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