Why does Amcor use long-term debt? Why use foreign debt vehicles when there are good Australian banks to borrow from?
Amcor is a global company and has relationships with banking institutions in many regions, including a core group of Australian providers. As a matter of prudent long-term financial management, Amcor has a management target to lengthen the average maturity of its long term debt to a range of 5-7 years in addition to having a balanced mix of bank and non-bank funding. The US Private Placement of USD850 million made in 2009 has debt repayments spread over the period 2013-2022. This avoids a concentration of debt repayments at a particular point in time and the fixed interest coupons of these notes allows for better management of interest rate risks over time. These types of debt issues allow for much longer term funding than is available from banks and thus facilitates a more stable and diversified financing structure for the Group. It also provides foreign currency debt which can be matched against the foreign currency denominated assets of the group to better manage currency fluctuatio
Amcor is a global company and has relationships with banking institutions in many regions, including a core group of Australian providers. As a matter of prudent long-term financial management, Amcor has a management target to lengthen the average maturity of its long term debt to a range of 5-7 years in addition to having a balanced mix of bank and non-bank funding. The US Private Placement of USD850 million made in 2009 has debt repayments spread over the period 2013-2022. This avoids a concentration of debt repayments at a particular point in time and the fixed interest coupons of these notes allows for better management of interest rate risks over time. These types of debt issues allow for much longer term funding than is available from banks and thus facilitates a more stable and diversified financing structure for the Group. It also provides foreign currency debt which can be matched against the foreign currency denominated assets of the group to better manage currency fluctuatio
Related Questions
- How should purchases and sales of long-term foreign currency-denominated securities (debt and equity) by foreign residents be reported?
- What does report purchases or sales of long-term securities (debt or equity) from the viewpoint of the foreign resident mean?
- Who should report redemptions of U.S. and foreign long-term debt?
