Olam issues 7b yen of sustainability-linked notes

FOOD and agri-business giant Olam International on Friday announced the issuance of seven billion yen (S$89.8 million) of five-year sustainability-linked notes.

The senior notes were issued to the Development Bank of Japan via a private placement under Olam's US$5 billion euro medium-term note programme.

The 2.05 per cent coupon rate on the notes may be reduced - via a tiered, one-time step-down adjustment - if Olam achieves the agreed sustainability targets linked to its purpose of re-imagining global agriculture and food systems.

Olam's managing director and group chief financial officer N Muthukumar said this is the first sustainability-linked fixed-rate note deal in Asia ex-Japan.

Both the Development Bank of Japan and Olam believe that innovative financing solutions can create social and environmental impact, he added.

The new notes, maturing on Dec 11, 2025, complement the Singapore-listed company's three existing sustainability-linked loans.

They are also the first sustainability-linked investment for the Development Bank of Japan.

Australia and New Zealand Banking Group was the sole manager, sustainability coordinator and swap dealer for the notes.

Proceeds from the issuance will be used for the Olam group's working capital and general corporate purposes, including financing capital expenditure and potential acquisition opportunities.

Shares of Olam rose S$0.02 or 1.3 per cent to trade at S$1.51 as at 1.13pm on Friday.