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Telecom raises 200m Swiss francs in fully-subscribed sale

Tuesday 8th July 2008

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Telecom Corp, the biggest stock on the benchmark NZX 50 Index, raised 200 million Swiss francs (NZ$258 million) in a fully-subscribed sale, showing investors are willing to buy investment-grade debt.

The bonds, rated A by Standard & Poor's, will be issued on August 6 under the company's existing medium-term notes program, it said in a statement. The sale was fully subscribed, it said. Telecom marketed the sale to investors in the last week of June.

Reuters yesterday reported the results of a British survey that showed pension funds moving assets into bonds from equities. Telecom Treasurer Andrew Hopkinson said the ability of incumbent phone companies to produce "strong, consistent cash flows" stoked demand for the debt.

"There is liquidity in the right markets for the right corporates with the right credit ratings," Hopkinson said in a BusinessWire interview.

The August 2012 bonds have a coupon of 4.375% , Bloomberg News reported.

By Jonathan Underhill

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