Downer EDI unit raises NZ$150 mln senior bonds

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SYDNEY, June 5 (Reuters) - A New Zealand unit of Australian
engineering contractor Downer EDI Ltd (DOW.AX) will pay 500
basis points over swap on its issue of NZ$150 million ($95
million) in three-year senior bonds, the company said.

The margin was at the top end of the 450-500 bp preliminary
range.

The offer, called Works Bonds, will pay at least 9.25
percent per year with the final interest rate to be set around
June 25, after the close of the issue.

Strong demand allowed the borrower to sell NZ$150 million
of bonds straight away, the maximum it was planning to raise
when it announced the offer last month, joint lead UBS said
separately.

Oversubscriptions of up to NZ$50 million, initially set
aside for employees and shareholders, were cancelled.

The offer drew New Zealand retail investors only and no
institutional investor participated in the issue.

The bonds are expected to be rated BBB-minus by Fitch,
similar to parent company Downer EDI, and will pay a margin
step up of 125 basis points should the ratings fall by one
notch to BB-plus or below.

The bonds will mature on Sept. 15, 2012 with the proceeds
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:

Offer opens-closes: June 3-24

Issue: June 30

Maturity: Sept 15, 2012
(Reporting by Cecile Lefort)