Telstra nets $180m from NZ market

By PETER GRIFFIN

Telstra's first effort to borrow money in the New Zealand market has raised $180 million, much of which will be used to fund local subsidiary TelstraClear.

Telstra launched a corporate notes programme in September aimed at raising between $200 million and $300 million.

It recruited the major banks as dealers, who raised the money over the course of four paper issues.

The programme is ongoing, so more money can be raised to reach Telstra's fundraising target.

"The deals have been competitively priced, with each of the three dealers - ANZ, BNZ and Westpac - all being lenders," said Telstra spokeswoman Angela Martinkus.

Specific uses for the money have not been explained, but Telstra said a portion of it would fund TelstraClear, which last year refinanced a $600 million funding facility. The remainder would be used for "general corporate funding purposes".

Telecom expects to go overseas this year with a $400 million bond issue to "refinance current debt on a longer-term basis". Asian, European and US markets would be considered for the bond issue, which spokesman Philip King said would not affect Telecom's plans to shave $1 billion in debt from its books over the next two to three years.

"Once we've completed that $400 million financing, we'll have very limited financing needs over the next couple of years," said King, former general manager of finance who has now moved into a wider role heading corporate affairs at Telecom.

Telecom treasurer Nick Olson has taken over the finance position.

King said debt would continue to be reduced gradually over the coming quarters.

Telecom wanted to keep the average term of debt over four years.

King said the debt markets were reasonably stable and Telecom's name in Europe and Asia was good.

Telecom has had an active retail bond programme in New Zealand for more than a decade.

King said that would probably be a part of future funding as well.