Telstra, the Australian telecommunications company, today announced plans for a possible $A500 million ($392 million), eight-to-nine year long term bond issue in early March, targeted at domestic and offshore institutional investors.
CFO John Stanhope said the company had been encouraged to return to the domestic market to meet investor demand for a new issue, following the strong performance of its recent $A500 million 10-year bond issuance (maturing in April 2015) in November 2004.
Stanhope said the proposed issue would fill a gap in Telstra's maturity profile and increase the proportion of its debt raised in the domestic market in line with the company's objective to diversify funding sources.
Stanhope said the domestic bond market was providing cost efficient financing compared with offshore markets and had the added advantage of straightforward execution without the need for currency swaps.
"The domestic market is one of the key planks in our funding strategy and the proposed new issue would further strengthen our range of benchmark lines and also help provide increased liquidity," he said.
The proceeds of the issue will be used to refinance maturing long-term debt, as well as for general corporate funding purposes.