By Cecile Lefort
SYDNEY, Nov 17 (Reuters) - New Zealand dairy processor Fonterra plans to be a regular borrower in the dim sum bond market as the world's largest milk exporter expands its presence in China, a company executive said on Tuesday.
Earlier this year Fonterra raised 1 billion yuan ($157 million) in dim sum debt - bonds issued outside of China but denominated in yuan - to help fund its investment in Beingmate Baby and Child Food.
China is a crucial market for Fonterra, importing about a quarter of New Zealand's total dairy exports to meet growing demand for milk products.
"It's natural for us to raise renminbi (yuan) funds to match those businesses," said Simon Till, director of capital markets at Fonterra on the sidelines of a UBS Australasia conference in Sydney.
Till wouldn't give specific timing for a return to the dim sum market, in part because Fonterra can also borrow yuan from banks in China or swap offshore funds.
On the currency front, Fonterra Chief Financial Officer Lukas Paravicini welcomed a lower kiwi dollar NZD=D4 which has tumbled 17 percent this year.
He forecast the local currency to stabilise around 63 to 65 cents. It was last at $0.6459. The kiwi's decline is a boon to New Zealand farmers as milk prices are based in U.S. dollars.
Fonterra has been struggling with a sharp fall in dairy prices due to slowing economic growth in China and a global oversupply of milk products. It has laid off 835 staff globally.
"We don't see, other than any normal fluctuation in any company, more layoffs," Paravicini said.
He said he was disappointed by the decision of two ratings agencies to downgrade the co-operative.
Last month, citing a weaker financial risk profile, Standard & Poor's and Fitch cut Fonterra's ratings to A-minus and A respectively.
"Our guidance to the market is that we want to maintain the ratings," said Paravicini.
"We will have by the end of the year a gearing ratio of 40 to 45 percent."
($1 = 6.3760 Chinese yuan renminbi)