TELSTRA GROUP LIMITED — Capital/Financing Update 2004

Nov 10, 2004

11 November 2004

The Manager

Company Announcements Office Australian Stock Exchange 4^th Floor, 20 Bridge Street SYDNEY NSW 2000

Office of the Company Secretary

Level 41 242 Exhibition Street MELBOURNE VIC 3000 AUSTRALIA

Telephone 03 9634 6400 Facsimile 03 9632 3215

ELECTRONIC LODGEMENT

Dear Sir or Madam

Telstra announces successful \$A500 million long term bond issue

In accordance with the listing rules, I attach an announcement for release to the market.

Yours sincerely

Port brake

Douglas Gration Company Secretary

Telstra Corporation Limited ACN 051 775 556 ABN 33 051 775 556

Media Release

11 November 2004

384/2004

Telstra announces successful \$A500 million long term bond issue

Telstra today announced the successful issue of a benchmark \$A500 million 6.25 per cent coupon bond with a maturity of April 2015.

The issue marks Telstra's return to the Australian dollar bond market after an absence of more than two and a half years. The Telstra bond is the longest term corporate bond in the Australian market at present.

The bond was almost two times over-subscribed and follows the recent well-received roadshows led by Telstra's Chief Financial Officer, Mr John Stanhope and Telstra's Corporate Treasurer, Mr Cliff Davis in Melbourne and Sydney and audio presentations to overseas investors earlier this month.

Mr Stanhope said that the positive result would encourage Telstra to consider further borrowings in the Australian dollar bond market in the future.

"This issue demonstrates the continuing strength and development of the domestic and offshore Australian dollar market which is showing increasing depth, efficiency and sophistication," he said.

"The transaction is an excellent outcome in that it provides globally competitive pricing, further diversification of our investor base and moves us toward our longer term target of borrowings domestically in Australian dollars. The length of maturity is also beneficial in helping align our debt portfolio maturity with our asset base," Mr Stanhope said.

Mr Stanhope added that Telstra had now completed well over half of its \$A2.5 billion, long term funding plans for FY04/05 and was comfortably on target to achieve the remainder by June 2005.

The bond was widely distributed to around 40 key institutional investors in Australia, Europe and Asia.

"This bond issue saw an increase in demand from offshore investors, confirming a trend that commenced about five years ago when Telstra's Australian dollar bonds were concurrently offered to offshore as well as domestic investors," Mr Stanhope said.

The issue was priced at $0.50$ per cent per annum over the $10$ year interest rate swap rate and provided investors with an attractive yield of 6.45 per cent per annum.

The bond issue was jointly led by National Australia Bank and Westpac Institutional Bank with RBC Capital Markets and TD Securities as senior managers.

The proceeds of the issue will be used for general corporate funding purposes and to refinance maturing long-term debt.

Telstra conducted a successful EUR 500m 10 year issue in July 2004 and is currently considering a $NZ150 - 200$ million, $7 - 10$ year long term bond.

Telstra is rated $A+$ (S&P), A1 (Moody's) and $A+$ (Fitch) and all ratings have a stable outlook.

Telstra Media Contact Kerrina Lawrence Telstra Media Relations 03 9634 5611 0419 352 313

Telstra's national media inquiry line is 13 1639 and Telstra's Media Centre is located at: www.telstra.com.au/communications/media