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Olam secures world's first digital loan of US$350m
OLAM International and its wholly-owned subsidiary Olam Treasury have secured a three-year digital-linked revolving credit facility of US$350 million.
The food and agri-business company said this is the world's first "digital loan" – where the pricing of the facility is linked to Olam's "digital maturity score", thereby supporting Olam in its ongoing efforts towards digital transformation.
The digital maturity score is determined by the Boston Consulting Group using its proprietary "Digital Acceleration Index" methodology which assesses Olam across four criteria, namely: (a) business strategy driven by digital, (b) digitising the core, (c) new digital growth and (d) enablers.
Olam and the participating banks have agreed on annual improvement targets over the course of the facility which, if achieved, would trigger a reduction in the interest rate.
Proceeds from the facility will go towards the refinancing of existing loans.
Olam's group chief operating officer A Shekhar said: "This financing can be a good template to drive the agriculture sector's digital transformation, and is another example of Olam's commitment towards our purpose of reimagining global agriculture and food systems."
The seven banks appointed as mandated lead arrangers who will be participating in the facility in equal parts are: Banco Bilbao Vizcaya Argentaria, DBS Bank, First Abu Dhabi Bank PJSC, JPMorgan Chase, Mizuho Bank, Natixis and Standard Chartered Bank.
BBVA is the digital coordinator and facility agent.