Telecom readies Aussie debt programme

By Phil Boeyen, ShareChat Business News Editor

Monday 6th August 2001

The Commonwealth Bank has been appointed to handle a A$1.5 billion note programme in Australia to help fund Telecom's (NZSE: TEL) trans-Tasman operations.

Telecom finance manager, Pat Duignan, says the Australian capital market is very efficient and able to deliver attractive funding for the group's existing operations and the bank has been mandated to arrange a combined short and medium term note programme.

"The move into the Australian capital market follows Telecom New Zealand's full takeover of Australian carrier AAPT in 2000.

"The programme size has been set at A$1.5 billion to provide for both short term note issuance and medium term note (bond) issues."

Mr Duignan says Telecom New Zealand has a strong credit story, and both Moody's and Standard & Poor's have assessed its ratings outlook as stable. He says AAPT's commercial paper would be retired over time as commercial paper issues by TCNZ Finance - Australian Branch were phased in.

The Commonwealth Bank says the Australian debt market will welcome bonds (or notes) issued by the New Zealand telco

"The sector has significant capacity and the new name offers diversification benefits for the market. Telco issues are typically liquid with established yield curves and credit differentiation. These factors make them attractive to domestic and offshore investors in the Australian dollar market," the bank says.

Telecom is planning an investor roadshow in Australia later this month, following the release of its annual result next week.

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