“Due to significant investor demand the issue was more than four times oversubscribed, leading to an increase in the size of the deal from $US175 million to $US230 million,” Fairfax says.

Money raised from the debt issue have been exchanged into New Zealand dollars and Australian dollars as part of the repayment of the acquisition bridging facilities used by Fairfax in June to acquire Independent Newspapers Ltd’s publishing business in New Zealand, with the refinancing due to take place no later than June 2004.

Fred Hilmer, Fairfax CEO, says, “We are pleased to have such a strong vote of confidence by international investors. “The placement was heavily oversubscribed. As a result, Fairfax has been able to part refinance its acquisition debt on very favourable terms, and our balance sheet is stronger as a result. The placement has increased the average maturity of the company’s debt structure and diversified the sources of long term debt.”

According to Fairfax the issue comprised of maturities ranging from seven to 15 years. The weighted average maturity of the issue is approximately 11 years and the average cost of the funds swapped into the New Zealand dollars tranche is bank bills plus 58 basis points. The cost of hedging all currency risk and future interest and principal payments is included in the margin.

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