Downer EDI unit plans NZ$100 mln bond at 450-500bp

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SYDNEY, May 27 (Reuters) - The New Zealand unit of
Australian engineering contractor Downer EDI Ltd (DOW.AX) plans
to sell NZ$100 million ($62.23 million) in three-year senior
bonds, it said on Wednesday.

Preliminary pricing suggests a range of 450 to 500 basis
points over three-year swap, joint lead UBS said.

The offer, called Works Bonds, will mainly target New
Zealand retail investors and could be increased to NZ$150
million.

The final margin will be determined on June 2 following a
bookbuild and the interest rate will be at least 8.75 percent,
the company said.

The bonds are expected to be rated BBB-minus by Fitch,
similar to parent company Downer EDI, and will mature on Sept.
15, 2012.

Proceeds are to help repay debt and for general corporate
purposes.

ANZ, Forsyth Barr, UBS and Westpac Institutional Bank are
the joint leads with BNZ Capital acting as co-manager.

The issuer is Works Finance (NZ) Ltd, a wholly owned
subsidiary of Downer EDI.

Key offer details:

Bookbuild: June 2

Margin announcement: June 2

Offer opens-closes: June 3-24

Issue: June 30

Maturity: Sept 15, 2012
(Reporting by Cecile Lefort; Editing by Denny Thomas)