gets desperate and goes o/seas for $cash

Coates Hire Limited (COA) today advised it has entered into arrangements to raise $US160 million (A$204 million) through a private placement to US institutional investors. The Australian equipment hire company also advised that it has simultaneously entered into cross-currency interest rate swaps to exchange the US dollars raised into Australian dollar liabilities.


The company advised that offer has been ten times over subscribed, with the proceeds from the placement being initially be applied to pay down domestic debt by reducing current drawings under the existing debt facility.

The placement involves tranches of seven, ten and twelve year bonds, with coupons set 90, 95 and 105 basis points respectively over US Treasuries.

"The placement will enable us to lengthen our debt profile and spread our debt maturities over a 12-year period. At the same time, it further diversifies and improves the mix of our debt funding sources," noted Mr Geoff Fardell Coates chief financial officer.

Coates currently has an Australian debt facility with Westpac, NAB and ANZ, and it is the Company’s intention to maintain this facility.

National Australia Bank and the Royal Bank of Scotland acted as agents for the placement.

The transaction is to be settled mid-December 2004.