Olam prices S$300m subordinated perpetual securities

OLAM International on Tuesday announced that it has priced S$300 million of subordinated perpetual securities under its US$5 billion Euro Medium Term Note Programme.

The securities will constitute direct, unconditional, unsecured and subordinated obligations of Olam, and there is no maturity date for the securities.

Olam said that the issuance was priced following an intraday book-building exercise which resulted in an "oversubscribed order book".

Institutional investors, such as fund managers and banks, were allocated 18 per cent of the issuance, with the balance allocated to private banks.

Olam added that the securities were priced at par and bear a distribution rate of 5.5 per cent for the first five years, which was below the initial pricing guidance.

The agri-business company noted that the distribution rate will be reset (and subject to a step-up margin) at the end of five years from the issue date of the securities and each date falling every five years thereafter. It may also choose to redeem in whole the securities on each distribution payment date falling on or after the fifth anniversary of the issuance of the securities.

Jayant Parande, president and global head of treasury and investor relations at Olam, said: "This transaction is aligned with our strategy of actively managing the company's capital structure in a cost-effective manner."