Orica Completes a Breakthrough with Fully Swapped US Private Placement Note Issue for A$559 Million

6 May, 2005

Orica Limited’s (Orica) wholly-owned subsidiary, Orica Finance Limited, last night successfully completed an issue of A$559 million guaranteed senior floating rate 10 and 12 year notes, due 2015 and 2017, in the US Private Placement debt market. The transaction is the third debt raising by Orica in the US Private Placement market, following a US$255 million issue in October 2000 and a US$185 million issue in October 2003.

The A$267 million 10 year tranche was priced at 6 month BBSW plus 65 bps and the A$292 million 12 year tranche was priced at 6 month BBSW plus 67 bps.

Orica has received all of the issue proceeds in floating interest $A and this has been achieved under a single set of documents and with all of the participating US investors transacting a simultaneous cross-currency interest rate swap with Citigroup, Orica’s Sole Placement Agent for this transaction. This structure and outcome is believed to be a World first.

Twelve US investors who already held Orica US Private Placement notes participated in the transaction, with six new US investors also participating. In addition, four new Australian fixed income investors took part in the transaction.

Noel Meehan, Chief Financial Officer of Orica, stated that the structure of the transaction delivered Orica floating rate $A funds without the need for Orica to enter into swap transactions with bank counterparties. "This process was more efficient for Orica, avoided the need to use Orica’s bank credit lines and also means that there are no hedge accounting requirements".

The proceeds of the issue will be used by Orica to repay committed bank lines and commercial paper on issue, resulting in an increase in the weighted average tenor of Orica’s debt from 4.5 to 8.3 years. Mr Meehan said that the repayment of committed funding lines means that they are now available to fund further low risk growth opportunities.

Mr Meehan paid tribute to Orica Corporate Treasurer, Frank Micallef and Deputy Treasurer, Geoff McMurray, and their team for successfully managing the placement.

END