Wesfarmers to raise EUR500m on bond issue
Wesfarmers Limited (WES) said it is to raise about EUR500 million following the successful pricing of an inaugural issue of bonds under its Euro Medium Term Note programme. The company said the issue consists of notes with a tenor of five years and four months at a margin of 135 bps over the EURO five year mid swap rate, maturing in July 2015.
Wesfarmers said the proceeds are intended to be applied to the repayment of existing shorter term borrowings, which may result in bringing forward interest rate hedge close out costs of approximately $30 to $40 million into FY10.
The company said the notes would rank equally with its existing senior debt facilities and are expected to be rated BBB+ by Standard & Poor's and Baa1 by Moody's.
Wesfarmers said the notes are denominated in Euro and the proceeds have been fully swapped to Australian Dollars at an all up swapped margin of approximately 228 bps over the three-month bank bill rate.
The company said the notes would be listed on the Singapore Exchange and would not be offered for sale in Australia.
Wesfarmers’ finance director, Terry Bowen, said the company was very pleased with the result of the issue, which was heavily over-subscribed.
“This further diversifies the group’s funding sources and reflects continued strong support for Wesfarmers from debt investors,” Mr Bowen said.
The company expects completion of the issue of the notes on 10 March 2010.
As at 1026 AEDT, Wesfarmers shares were down 7c to $32.50.
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