Olam International has priced a benchmark $250 million of subordinated perpetual securities under its US$5 billion ($6.63 billion) Euro Medium Term Note Programme on Jan 12.
The securities will constitute direct, unconditional, unsecured and unsubordinated obligations of Olam. There is no maturity date for the securities.
The issuance was priced at par following an intraday book-building exercise.
The securities bear a distribution rate of 5.375% for the first five and a half years.
The distribution rate will then be reset and subject to a step-up margin at the end of five and a half years from the issue date of the securities, and each date falling every five years thereafter.
SEE:Olam International acquires 51% stake in Togo's state-owned cotton company for $24.4 mil
Olam may also choose to redeem the securities in whole on each distribution payment date falling on or after the five-and-a-half year anniversary of the issuance of the securities.
Credit Suisse (Singapore), DBS Bank, The Hong Kong and Shanghai Banking Corporation and Standard Chartered Bank (Singapore) were the joint lead managers.
Net proceeds from the issuance will be used by Olam for working capital purposes and general corporate purposes including financing capital expenditure.
N Muthukumar, Managing Director and Group CFO of Olam, says: “This issuance marks Olam’s return to the public capital markets for subordinated perpetual securities since 2017. The issue was well subscribed, leading to a final distribution rate of 5.375%, which was tightened from an initial pricing guidance of 5.50%.”
Shares in Olam closed 1 cent lower or 0.6% down at $1.57 on Jan 11.
