Australian Foundation launches A$200 million five-year convertibles to yield 6.25%, up 25%

By Rebecca Melvin

New York, Nov. 14 - Australian Foundation Investment Co. said it plans to sell A$200 million of five-year convertible notes at par of A$100 to yield 6.25% with an initial conversion premium of 25% over the volume weighted average price of the company's shares for five days prior to the Dec. 19 issue date, according to a news release.

The issue may be increased by as much as A$100 million for a A$300 million deal size.

Shareholders will have priority in participating in the deal, which is set to open Nov. 22 and close Dec. 12.

Trading of the notes on the Australian stock exchange is set to begin Dec. 22.

The notes mature Feb. 28, 2017.

Australian Foundation said it is in a strong financial position to pay interest on the notes and for the return of funds at maturity.

Melbourne-based Australian Foundation is an investment company with a market value of A$4.32 billion as of Sept. 30, 2011, excluding cash.

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