04/03/2010 - 08:48

Wesfarmers taps overseas debt markets

04/03/2010 - 08:48

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Diversified conglomerate Wesfarmers has drawn on overseas debt markets to raise €500 million ($A775 million) to repay existing shorter term borrowings.

Wesfarmers taps overseas debt markets

Diversified conglomerate Wesfarmers has drawn on overseas debt markets to raise €500 million ($A775 million) to repay existing shorter term borrowings.

The Perth-headquartered company today said in a statement that it had priced the inaugural issue of bonds under its Euro medium term note (EMTN) program.

The issue consists of notes with a tenor of five years and four months at a margin of 135 basis points over the Euro five-year mid swap rate, maturing in July 2015.

Wesfarmers said the notes will rank equally with its existing senior debt facilities and are expected to be rated BBB+ by ratings agency Standard & Poors and Baa1 by Moody's.

It added that the notes are denominated in Euro and the proceeds have been fully swapped to Australian dollars at an all swapped margin of about 228bps over the three-month bank bill rate.

"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 AUD 30 to 40 million into the 2009/2010 financial year, depending upon the timing and amount repaid," Wesfarmers said.

The notes will be listed on the Singapore Exchange and will not be up for sale in Australia. Shareholder approval for the issue of the notes is not required.

Wesfarmers established the EMTN program in October 2008 and appointed BNP Paribas as manager while ABN AMRO, Deutsche Bank and Societe Generale Corporate & Investment Banking were appointed dealers.

Shares in Wesfarmers climbed up 22 cents to $32.79 at 11:25 AEDT.

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