Fletcher extends debt maturity in $379m private US deal

Fletcher Building chief executive Jonathan Ling. Photo / Richard Robinson

This year's largest corporate refinancing of an NZX-listed business was declared a success yesterday.

A Fletcher Building notice to NZX said it raised US$300 million ($379 million) in long-term debt through a private placement with American debt investors which it did not name.

Those are understood to be large insurance businesses operating in the same fields as ING, AIG, Prudential and Guardian.

The private placement has maturities of 10 and 12 years and replaced repaid bank debt, although the facilities remained open so Fletcher could borrow more if it wanted.

"The proceeds have been used to repay borrowings drawn under Fletcher Building's principal bank facilities. The funds raised have been swapped into Australian dollars in a mix of fixed and floating interest rates," the company said.

Chief financial officer Bill Roest said Fletcher had previously used this market for longer-term funding.

"With the completion of this transaction we have been able to extend the debt maturity profile which suits the long-term nature of our business. What is especially pleasing is that we have continued to see good support for Fletcher Building from the US private placement market."

Fletcher's latest annual report showed it had debt of just under $2 billion: $1.8 billion non-current borrowings maturing over the longer term and $139 million current borrowings maturing within the year.

The US$300 million will be applied to borrowings across the entire Fletcher group in many different countries. Fletcher's annual report declared borrowed funds from mainly US private investors with maturities between 2015 and 2020.