Fonterra chief executive Andrew Ferrier. Photo / Dean Purcell
Fonterra chief executive Andrew Ferrier. Photo / Dean Purcell
Fonterra may sell yuan-denominated bonds to fund planned dairy farms in China, a spokesman said yesterday.
The Auckland firm had yet to make a decision on a sale, he said.
Chief executive Andrew Ferrier said last week that Fonterra might add "multiple" farms to its Chinese business to meet aforecast surge in demand for dairy fuelled by rising incomes and expanding population.
Fonterra, which accounts for 40 per cent of the global trade in dairy products, has $2.7 billion of bonds due to mature through 2049, according to data compiled by Bloomberg.
China, the fastest-growing major economy, changed rules last year to allow foreign companies to sell so-called Dim Sum bonds in yuan through Hong Kong. Restaurant giant McDonald's became the first foreign non-financial company to sell Dim Sum bonds when it offered 200 million yuan ($39 million) of 3 per cent notes due 2013 in August.
HSBC Holdings, the top-ranked underwriter of the debt, expects sales will more than triple this year as demand surges for China's currency outside the country. The average yield on yuan-denominated bonds in Hong Kong has fallen to 1.911 per cent from a high of 2.28 per cent on December 31, according to HSBC data.
Fonterra in October agreed to develop a dairy farm in China's Hebei province. Its farm at Tangshan has doubled to more than 6000 cows since it opened in 2007.
