Olam announces Singapore's largest corporate bond issue so far in 2014
TOMOMI KIKUCHI, Nikkei staff writer
SINGAPORE -- Olam International, the world's largest palm oil trader and a leading processor of agricultural products and foodstuffs, announced on Wednesday a 400 million Singapore dollar ($322 million) five-year bond issuance on July 22.
Bearing fixed interest of 4.25%, the issuance is Olam's first since it became a subsidiary of Temasek Holdings, Singapore's sovereign wealth fund, in May. The S$250,000 notes are being issued under the $5 billion euro medium term note program established by the company in 2012.
According to Olam, the issuance has been oversubscribed with over 100 private and institutional investors showing interest.
The Royal Bank of Scotland, one of three joint bookrunner banks, noted that the issuance "represents the largest tranche Singapore dollars (SGD) corporate bond issue in 2014 and is the largest single tranche SGD corporate bond issue from a Temasek-linked company since 2012".
"Proceeds from the issue of the notes will be used by the company and its subsidiaries for working capital purposes and general corporate purposes, including financial capital expenditure and potential acquisition opportunities which (Olam and its subsidiaries) may pursue in the future as part of its strategic objectives," Olam said in a statement.
The issuance comes as the U.S. moves to taper its monetary easing policy, encouraging some companies to raise medium to longer term capital through fixed interest products such as corporate bonds before rates from other sources rise.