Leighton to redeem $110m Indonesian Bond issue

Australia-listed firm Leighton Holdings Limited announced Friday that it?s wholly owned subsidiary, Leighton Finance international Limited was redeeming the 5-year 7.875% fixed-rate US$110m Guaranteed Notes issued on 16 May 2006.

Chief Financial Officer, Peter Gregg, said that notice is hereby given that the Company intends to redeem the Notes at their principal amount, together with accrued and unpaid interest, pursuant to the terms and conditions of the Notes, on 16 May 2011, being the maturity date of the Notes. Upon their redemption at maturity, all the Notes will be cancelled, the company said.

?The proceeds of the Notes issue have been used to support and grow the Leighton Group?s operations in Indonesia. However we have increasingly been funding the Group?s mining operations using in-country, US$ denominated leasing facilities and will fund the balance of our requirements using the Group?s existing financing facilities,? said Gregg.

?A major rationale for the Notes issue was to access US$ borrowings which provides a natural hedge against our US$ denominated business in Indonesia. Since the Notes issue, we have tapped the US Private Placement market which diversified our funding, both in terms of currency and duration, and this negates the requirement for the Notes issue.

?The duration of our debt portfolio is lengthening with the profile gradually restructured over recent years to longer-term debt. In addition, the US Private Placement financing has been done at a substantially lower rate than the existing Notes issue so our cost of funding has been reduced. (romel)