http://www.smh.com.au/business/us-ad-recovery-bolsters-hopes-at-m...

http://www.smh.com.au/business/us-ad-recovery-bolsters-hopes-at-macquarie-media-20091014-gvy3.html

BONDS ARE BACK

The corporate bond market's emergence as a viable, or even preferable, alternative to tough negotiations with lenders to gain extensions on existing facilities has clearly been noted by Incitec Pivot.

Yesterday it revealed that Standard & Poor's had assigned it a maiden BBB rating with a stable outlook. Incitec has quite a bit of bank debt, including a $698 million working capital facility, which reduces over a term ending October next year, and a $1.68 billion syndicated facility maturing in September 2011.

It would not be surprising if the company, and probably some of its lenders, would prefer to see it diversify its sources of funding. Incitec said it was seeking to gain access to a ''broad range'' of debt markets.

Asciano is trying to do the same. The rail and ports group is in talks with ratings agencies about getting a maiden rating, and is said to be targeting a grade of BBB or BBB+.

Dealogic figures show that in the first nine months of the year Australian companies, excluding banks, raised $11 billion from bond markets. This is the highest year-to-date level ever and almost double the $5.8 billion raised in the same period last year.

In the local bond market, Leighton Holdings, which has a BBB rating, priced five-year notes at 400 basis points over swap a few months back. And last month Wesfarmers, which is rated BBB+, priced $500 million of five-year notes at 260 basis points over swap. The conglomerate has also met recently with prospective bond investors in the US and Europe.