Silver Fern breaches bank covenant on currency hedges

Tuesday 9th December 2008

Silver Fern Farms, the nation's biggest exporter of red meat, said it is in breach of its bank covenants after marking to market its foreign currency hedging.

The meat processor said the breach reflects the "recent rapid decline" in the New Zealand dollar against the U.S. dollar.

The covenant in breach relates to minimum levels of shareholder funds.

Silver Fern said it has requested a waiver from its banks and the banks are considering revising the covenant "to accommodate such volatility." The breach doesn't apply to the company's exchange traded bonds.

By Jonathan Underhill

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