Olam unit secures $2.76 billion sustainability-linked loan

SINGAPORE (THE BUSINESS TIMES) – Olam Group’s wholly-owned food ingredients unit Olam Food Ingredients (OFI) has obtained a multi-tranche, sustainability-linked facility aggregating about US$1.98 billion (S$2.76 billion) from a total of 19 banks from Australia, Canada, Europe, Japan, the Middle East, Singapore and the US.

With holding company Olam Holdings BV as a borrower, the facility is initially guaranteed by Olam Group and will be transferred to OFI after its planned initial public offering (IPO) and demerger from the group.

It comprises a two- and three-year revolving credit facility as well as a three-year loan, with its interest margin linked to the achievement of sustainability targets across ESG (environmental, social and governance) areas.

Proceeds will be applied towards refinancing of OFI’s existing loans and for general corporate purposes, said OFI in its press on Tuesday (Aug 30).

The banks which participated in the facility have been categorised into four tiers, with DBS among the joint sustainability coordinators and senior mandated lead arrangers.

Standard Chartered and BNP Paribas count among the transaction’s senior mandated lead arrangers, with BNS Asia as the sole mandated lead arranger.

Lead arrangers include Barclays and Citigroup, while HSBC has been appointed the facility agent.

Shares of Olam Group were trading unchanged at $1.48 as at the midday break on Tuesday, before the announcement was made.