Fonterra capital notes interest rates at 7.48 percent

By NZPA

Wednesday 10th July 2002

Fonterra Co-operative Group is resetting the interest rate on its capital notes to 7.48 percent, effective from today.

The interest rate on the notes was previously 7.00 percent.

Fonterra resets the interest rate on July 10 each year to the base rate of the one year government stock rate, plus a margin based on the notes' credit rating.

"With the Standard and Poor's credit rating for the capital notes remaining the same at A-plus, the rise in the 12 month government stock rate means that the new rate is 7.48 percent," the company said in a statement.

That rate will remain through to July 10 next year, unless there is a change in the credit rating in the interim.

Fonterra issued $200 million principal amount of capital notes to investors in November 2001.

On July 16, shareholder suppliers who reduce the quantity of milk they supply to the company -- or cease supplying entirely -- will receive capital notes as consideration for their surrendered shares, rights or notes.

One bond dealer said interest in the Fonterra notes had dried up ahead of today's announcement, but was likely to pick up again.

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