Fonterra sells bonds with eyes on China
Source: Bloomberg News |
June 18, 2011, Saturday
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Print Edition
Print Edition
FONTERRA Cooperative Group Ltd, the world's biggest dairy exporter, has sold 300 million yuan (US$46.3 million) of bonds in Hong Kong in the first offering of dim sum debt by a non-financial company based in Australia or New Zealand.
HSBC Holdings Plc managed the sale and Fonterra will use the proceeds to fund its business in China, according to a statement to the stock exchange yesterday. The three-year notes pay a coupon of 1.1 percent, according to a source.
The offer shows "the growing importance of China to Fonterra's business operations," Stephan Deschamps, general manager of treasury at Fonterra, said in the statement. "It makes sense to seek a greater alignment between our treasury borrowing and our business activities."
Sales of yuan-denominated bonds in Hong Kong may surge five-fold to 200 billion yuan this year, according to Mizuho Financial Group Inc, as global investors bet on the Chinese currency appreciating more than currencies of the other so-called BRIC nations, namely Brazil, Russia and India. Dim sum issuance has already topped 50 billion yuan this quarter, compared with 18.6 billion yuan in the first three months of this year.
The Auckland-based company is the first Australasian non-financial firm to issue yuan bonds in Hong Kong, according to data compiled by Bloomberg News. Australia & New Zealand Banking Group Ltd sold 200 million yuan of two-year, 1.45 percent bonds in Hong Kong in December.
Fonterra is seeking to expand in China, where it forecasts dairy demand will rise by 36 million tons by 2020 as rising incomes fuel demand for proteins. Chinese demand for New Zealand milk products last year surged more than fivefold from 2008 to about 353 million kilograms, the company said in April.
HSBC Holdings Plc managed the sale and Fonterra will use the proceeds to fund its business in China, according to a statement to the stock exchange yesterday. The three-year notes pay a coupon of 1.1 percent, according to a source.
The offer shows "the growing importance of China to Fonterra's business operations," Stephan Deschamps, general manager of treasury at Fonterra, said in the statement. "It makes sense to seek a greater alignment between our treasury borrowing and our business activities."
Sales of yuan-denominated bonds in Hong Kong may surge five-fold to 200 billion yuan this year, according to Mizuho Financial Group Inc, as global investors bet on the Chinese currency appreciating more than currencies of the other so-called BRIC nations, namely Brazil, Russia and India. Dim sum issuance has already topped 50 billion yuan this quarter, compared with 18.6 billion yuan in the first three months of this year.
The Auckland-based company is the first Australasian non-financial firm to issue yuan bonds in Hong Kong, according to data compiled by Bloomberg News. Australia & New Zealand Banking Group Ltd sold 200 million yuan of two-year, 1.45 percent bonds in Hong Kong in December.
Fonterra is seeking to expand in China, where it forecasts dairy demand will rise by 36 million tons by 2020 as rising incomes fuel demand for proteins. Chinese demand for New Zealand milk products last year surged more than fivefold from 2008 to about 353 million kilograms, the company said in April.
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