The finance arm of rural servicing company PGG Wrightson is to raise $75 million by issuing secured bonds.
The company's director of financial services, Mark Dallow, said the money would be used to fund growth of more than 20% a year and maintain a diversified funding base.
In an announcement to the New Zealand Stock Exchange, Mr Dallow said PGG Wrightson Finance was considering offering up to $50 million in first-ranking secured, fixed rate, interest bearing bonds, and a further $25 million of secured bonds for over-subscriptions.
PGG Wrightson is part of the New Zealand retail deposit guarantee scheme.
Mr Dallow said the finance arm of the business grew 28% last year, and it was on track to grow more than 20% this year.
That growth had come from loans to sheep, beef, dairy, cropping and horticulture businesses, but most of the company's clients were sheep and beef farmers.
Dairy assets contributed about 25%, he said in an interview.
Mr Dallow said it was important to have a diversified funding base, and the company's was currently made up of bonds, debentures, equity and bank lines.
Bonds would mature next year, and he said the company wanted to retain its diversified funding base.
The secured bonds to be offered will mature on October 8, 2010 but, at the company's option, they could be rolled over for another year if the deposit guarantee scheme was extended.
Interest of 8.25% a year would be paid, or a margin of 2.25% above the interpolated swap mid-rate at October 8 2010.
It is expected the offer's lead manager, Forsyth Barr, would underwrite up to $50 million of the secured bonds, he said.
An investment statement would issued.
