Telstra aims to raise $200m in NZ market

By PETER GRIFFIN telecoms writer

Australian carrier Telstra is looking to borrow at least $200 million in the New Zealand market through a corporate notes programme and has recruited the main banks to bring in the money.

ANZ is organising the notes programme and has been appointed alongside the Bank of New Zealand and WestpacTrust on a panel of dealers given the task of securing the short-term loan.

Telstra's corporate treasurer, Cliff Davis, said some of the money raised would be put into TelstraClear, the loss-making subsidiary of which Telstra is a 58 per cent stakeholder. The rest would be used for "general corporate funding purposes".

"TelstraClear is not the only need we have for New Zealand dollars. Rather than borrowing money in Aussie dollars or US dollars, and then swapping it into New Zealand dollars, we're going [to the market] direct," he said.

The notes programme was not related to the $600 million owed by TelstraClear that was recently refinanced by Telstra. Davis said the $600 million would be paid to TelstraClear by September 12, and it in turn would repay the banks.

No cap had been set on how much Telstra hoped to borrow, but an evaluation of the market had shown that $200 million to $300 million was a realistic amount.

"But we probably have a demand for New Zealand dollars that goes beyond that," said Davis.

"If it goes okay, we'll look at moving into the bond market."

The notes programme signals the first time Telstra has borrowed in the New Zealand market, however its investment TelstraSaturn, TelstraClear's predecessor, had secured loans locally.

Telstra has already secured similar short-term funding in Australian and US dollars and euros.

Telstra's chief financial officer, David Moffatt, is likely to come to New Zealand in late September for a roadshow to meet the banks and investors.

Telstra hopes to start borrowing by mid-October.