Olam International secures Asia’s first sustainability-linked club loan facility of US$500.0 million
Singapore, March 26, 2018
Olam International Limited (“Olam’’ or the “Company”), a leading agri-business operating across the value chain in 66 countries, announced today that it has secured a three-year sustainability-linked revolving credit facility (the “Facility”) aggregating US$500.0 million. Olam Treasury Pte Ltd (a 100% subsidiary of Olam) is a co-borrower to the Facility.
This is Asia’s first sustainability-linked club loan – one that has multiple banks issuing the loan together and in collaboration with the borrower on achieving sustainability targets (1).
Under the Facility, Olam is committed to meeting improvement targets for a comprehensive range of environmental, social and governance (ESG) metrics, as assessed by Sustainalytics, a global leader in ESG and corporate governance research and ratings. The metrics are tested on an annual basis and if the pre-set improvement targets are achieved, the interest rate on the Facility will be subsequently reduced.
Olam’s Co-Founder and Group Chief Executive Officer, Sunny Verghese, said: “We are proud to be the first company in Asia and the agri-sector to secure a sustainability-linked medium term club loan that links interest rate on the loan to achieving clear sustainability targets.
“Olam is grateful to the 15 banks that have participated in this innovative facility. We believe that this will serve as a catalyst in further developing sustainability-linked financing in the region. This is a good example of how sustainable companies can become more successful and of how we can ‘do good’ and ‘do well’ at the same time.”
Olam has appointed 15 banks who will be providing the Facility in equal parts, namely: ABN Amro Bank N.V., Singapore Branch, Australia and New Zealand Banking Group Limited, The Bank of Tokyo-Mitsubishi UFJ, BNP Paribas (acting through its Singapore Branch), Commerzbank AG, Singapore Branch, Commonwealth Bank of Australia, Singapore Branch, DBS Bank Ltd., The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch, ING Bank N.V. Singapore Branch, Mizuho Bank, Ltd., National Australia Bank Limited, Natixis, Singapore Branch, Rabobank International, Standard Chartered Bank, & UniCredit Bank AG, Singapore Branch as Mandated Lead Arrangers for the Facility.
(1) This is unlike a syndicated loan where there is normally a lead bank which structures and arranges the financing. In this club loan format, Olam has self-arranged the 15 participating banks and will work in collaboration with them on achieving pre-set sustainability targets.
ING Bank is the Sustainability Co-ordinator for the Facility and BNP Paribas is the Facility Agent.