Fairfax closes A$ bond buyback at 84 cents -sources

SYDNEY, May 25 (Reuters) - Australian newspaper publisher
Fairfax Media Ltd (FXJ.AX) has closed the books of its bond
buyback and set the price at 84 cents to the dollar, two market
sources who have seen the offer final-terms said on Monday.

Fairfax could not be immediately reached for comment.

Fairfax said last week it was considering to buy back its
A$200 million ($155.6 million) bonds due in June 2011. Initial
pricing started at 81 cents, according to an investor who
participated in the buyback.

Bonds are usually redeemed at par.

Details on how much was bought back was not available and
Westpac, which led the buy-back, declined to comment.

The offer settles on May 27.

Fairfax's bond buyback follows a credit ratings downgrade
to BB-plus by S&P, or below investment grade, from BBB-minus
following an ongoing deterioration of advertising earnings.

Such a downgrade has forced some investors to sell the
bonds because their mandates bar them from holding
sub-investment grade debt.

The buyback allows holders to get out of Fairfax bonds now
rather than hold the debt for another two years until it
matures, and also allows Fairfax to pay down debt at a discount
and save on interest payments.

(Reporting by Cecile Lefort; Editing by Mark Bendeich)
($1=1.285 Australian Dollar)