Fonterra is considering making an offer of $250 million of senior bonds to institutional investors and to New Zealand retail investors.
The announcement by the dairy co-operative comes after ratings agency Standard & Poor's kept its A/A-1 ratings on Fonterra.
Craigs Investment Partners broker Chris Timms said the offer from Fonterra, with full details to be released next week, coincided with other bonds reaching maturity.
''I was quite surprised they did not co-ordinate a release of an offer at the same time as maturity was reached.''
The offer was part of Fon-terra's strategy to have diversity of funding so banks were not the only places from where the co-operative could borrow, he said.
ANZ had been appointed as arranger for the proposed offer. The joint lead managers were ANZ, BNZ, CBA and Westpac.
Mr Timms said banks were increasingly part of the capital markets and were paid for doing that job. That was why so many large companies were entering the bond market.
''Corporates need to have a diversity of funders.''
S&P credit analyst Brenda Wardlaw said the agency had also affirmed the issue ratings on all of Fonterra's debt, including the A rating and the cnAA+ Greater China regional scale rating on its Chinese renminbi notes and debt issued by its subsidiary New Zealand Milk.
''The rating affirmation reflects our view of Fonterra's strong business position as a low-cost, leading global dairy co-operative, together with the group's significant financial flexibility. We consider Fonterra's `strong' business and `intermediate' financial risk profiles to be at the upper end of their respective categories.''
Importantly for creditors, milk payments to Fonterra's New Zealand supplier base were effectively subordinated to payments to other creditors, she said.
Fonterra had a long-established track record of exercising its discretion over those supplier payments and through reforecasting milk prices to reflect global market conditions, both in advance of each season as well as during a season if required.
Also, it had a conservative advance policy and discretion over those advance payments and subsequent payments to those suppliers.
''It's low-cost base underpins this flexibility regarding its key raw material. This operational strength supports supplier retention and entrenches Fonterra's position as the leading milk supplier in the New Zealand market, and globally,'' Ms Wardlaw said.
