Thursday 21st May 2009 |
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A Fairfax Media subsidiary is offering to buy back its A$200 million fixed-rate notes due June 27, 2011. The media company was downgraded to a junk rating by Standard & Poor’s last week.
The publisher of the Sydney Morning Herald, Dominion Post and Press newspapers has not specified the quantum or price of the buy back, which opened today and is expected to close tomorrow. It said any medium-term notes not repurchased will be subject to the existing terms and conditions. S&P last week downgraded Fairfax’s credit rating below investment grade to BB+.
“Fairfax appreciates the continuing support of its MTN investors,” it said in a statement. It encouraged interested parties to contact Westpac Banking Corp. if they want to participate in the repurchase.
Before the downgrade, the company said it expected annual profit to drop 28% to around A$600 million. It slashed 550 jobs last year, placed a freeze on executive salaries, and cut the rate offered to New Zealand freelance contributors as dwindling advertising sales drag on the business.
In the first half, the media group had a loss of A$365 million, and the full-year earnings will be compounded by the extra A$10 million cost of interest repayments incurred by the credit downgrade.
The notes’ yield gained to 54.95 basis points from 54.95 points when it last traded. The shares rose 0.5% to A$1.105 on the ASX/S&P 200 today.
Its New Zealand subsidiary holds perpetual notes worth some $186 million on the New Zealand stock exchange with a current coupon of 8.03%. The yield gained to 92.25 basis points from 95 points last week around the time of S&P’s announcement.
Businesswire.co.nz
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