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Fletcher taps US investors for US$300M

Friday 13th January 2012

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Fletcher Building, the country’s biggest listed company, has tapped private US investors in a US$300 million debt placement to repay bank loans.

The Auckland-based company sold debt at two maturities of 10 and 12 years, and used the proceeds to repay borrowings drawn under its principal bank facilities, it said in a statement. The funds raised have been swapped into Australian dollars in a mix of floating and fixed interest rates. The Australian dollar recently traded at US$1.0332 after reaching parity with the greenback in October 2010.

“With the completion of this transaction we have been able to extend the debt maturity profile which suits the long term nature of our business,” chief financial officer Bill Roest said. “We have continued to see good support for Fletcher Building from the US private placement market.”

Local corporates have been returning to the US private debt markets to retire bank debt as a means to keep interest costs down and push out maturity profiles. Resins manufacturer Nuplex Industries flagged its interest in tapping the market last year.

Shares in Fletcher fell 0.9 percent to $5.81 yesterday, near the 2 ½-year low of $5.80 reached two days ago, amid concerns the country’s biggest construction company will have to downgrade earnings after the latest swarm of earthquakes in Christchurch push out the likely timeframe for the city’s reconstruction.


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