3 Feb 2009

Fonterra offers retail bonds

1:35 pm on 3 February 2009

Fonterra has revealed details of its plan to offer senior retail or long-term bonds, as part of a bid to raise funds it needs for working capital and other business purposes.

The dairy company announced the plans at the end of last year, saying the move would provide a rare opportunity for investors who are not farmer-shareholders, to invest in the business.

Fonterra is seeking to raise $300 million from the offer, which opens on Monday, and says it also has the ability to accept unlimited oversubscriptions from interested parties.

Chief financial officer Guy Cowan said this is the first time the company has offered retail bonds for public investment.

However he said it is not an unusual way for the company to raise finance for working capital and investments, and is cost effective.

Mr Cowan said Fonterra had previously raised money in the US private placement market and through a sterling issue.