Olam secures $349.36m sustainability-linked loan

The credit facility consists of three tranches.

Food and global agri-business, Olam International Limited and its wholly owned subsidiary, Olam Treasury, has secured a revolving sustainability-linked credit facility aggregating $349.36m (US$250m), according to an announcement.

The credit facility consists of three tranches with a 1-year revolving sustainability-linked credit facility (SRCF) of $69.87m (US$50m), a two-year SRCF of $139.75m (US$100m), and a three-year SRCF of $139.75m (US$100m).

Olam’s managing director and group CFO, N Muthukumar noted that this is the third sustainability-linked loan that Olam has executed in the last two years. Last year, the company announced a $733.66m (US$525m) sustainability KPI-linked RCF, and launched the world’s first Digital Loan of $489.11m (US$350m). It also announced Asia’s first sustainability-linked club loan of $698.73m (US$500m) in 2018.

The interest margin on the credit facility is linked to the achievement of key sustainability performance indicators (KPI) improvement targets and could be lower than comparable conventional loans, if those targets are met.

Proceeds will be applied towards general corporate purposes of Olam and its subsidiaries.

Under the facility, Olam has identified farmers and food systems, communities as KPIs that are aligned with the company’s sustainability strategy. The KPIs will be tracked and reported by Olam’s Corporate Responsibility & Sustainability team. Ernst & Young will perform procedures to independently assess the achievement of the KPIs.

Olam has appointed tANZ, DBS, as well as Standard Chartered Bank as senior
mandated lead arrangers and joint sustainability coordinators, whilst Rabobank will be the mandated lead arranger. Standard Chartered Bank has also been appointed as the facility agent.