March 17, 2010
NZX Regulation Decision
Fonterra Co-operative Group Limited
Application for waiver from NZDX Listing Rule 11.1.1
1. Fonterra Co-operative Group Limited ("FCG") is a listed Issuer with
securities quoted on the NZDX market.
2. FCG intends to make an offer of $150 million worth of fixed rate bonds
("Bonds") to be quoted on the NZDX market with the ability to accept $100
million of oversubscriptions.
3. FCG has submitted a simplified disclosure prospectus in respect of the
Bonds to NZX for review.
4. FCG has applied to NZX Regulation ("NZXR") for a waiver from NZDX Listing
Rule ("Rule") 11.1.1 to allow FCG to:
(a) restrict transfers if they result in the transferor or transferee holding
less than $5,000 (if not zero) in principal amount in Bonds; and
(b) require that Bonds be transferred in minimum amounts of 1,000 and
multiples of 1,000 thereafter.
5. In support of its application, FCG submits that:
(a) it would be unduly burdensome for FCG to be required to allow holders of
Bonds to hold a parcel of less than a Minimum Holding or to permit transfers
of less than 1,000 or multiples thereof as this would increase compliance
costs significantly; and
(b) minimum transfers of 1,000 is a commonly used threshold across all debt
(c) NZXR has granted waivers from Rule 11.1.1 in respect of previous issues
of debt securities, including to FCG in 2009.
6. Rule 11.1.1 provides:
Subject to the provisions of any legislation, and to Rules 11.1.4 and 11.1.5,
no Issuer shall impose, in its constitution or otherwise, any restriction on
the right of a holder of a Quoted Security to transfer that security, or any
restriction upon registration of a properly completed transfer of Quoted
7. Rule 11.1.4 provides:
An Issuer may decline to accept or register:
(b) a transfer of securities if such registration, together with the
registration of any further transfer or transfers then held by the Issuer
and awaiting registration would result in the proposed transferee holding
Securities of less than a minimum holding.
8. On the basis that the information provided to NZXR is full and accurate in
all material respects, NZXR grants FCG a waiver from Rule 11.1.1 to allow the
restrictions of transfer referred to in paragraph 4 above on the following
(a) FCG only allot Bonds in multiples of 1,000; and
(b) FCG may not refuse to accept or register a transfer if the transfer is
for all of a holder''s Bonds.
9. In coming to the decision to grant FCG a waiver from Rule 11.1.1 NZXR has
considered the following matters:
(a) As FCG will only allot Bonds in multiples of 1,000, investors are
unlikely to have odd lots that cannot be transferred.
(b) NZXR has previously granted waivers from this requirement to allow
transfer sizes to be standardised.
10. FCG have requested that this decision and the application made in respect
of it remain confidential until after the Prospectus is registered with the
Companies Office. NZXR grants this request in accordance with the policy
contained in footnote 1 to Rule 1.11.2.
End CA:00192592 For:FCG Type:WAV/RULE Time:2010-03-17:12:51:47