Olam International has secured a revolving credit facility of US$525 million tied to meeting key performance indicators (KPI) tied to sustainability, the agri-business said in a filing to SGX Tuesday.
The interest margin on the facility is tied to achieving improvement targets, which will be tracked and reported on by Olam’s corporate responsibility and sustainability team, the company said. Ernst & Young will independently assess the achievement scores, the filing said.
Under the deal, Olam identified KPIs tied with three outcomes: prosperous farmers and food systems, thriving communities and regeneration of the living world, the filing said.
“Sustainability has always been at the heart of Olam’s business. This facility, following on from last year’s US$500 million sustainability-linked loan, is another demonstration of how we are embedding sustainability into all aspects of our business and financing strategy,” A Shekhar, Olam’s chief operating officer, said in the statement.
“We will continue to explore further opportunities in the green and sustainability financing space,” Shekhar said.
Olam said the proceeds from the deal will be used to refinance existing loans.
Three banks — ANZ, BNS and Rabobank — were appointed as lead arrangers and six banks — Banco Bilbao Vizcaya Argentina, DBS Bank,
Santander, Barclays Bank, HSBC and Standard Chartered Bank — were named as mandated lead arrangers, Olam said.
In addition Rabobank and HSBC were named as the sustainability coordinator and facility agent, respectively, the filing said.
The facility has three tranches: a one-year revolving credit facility (RCF) of US$315 million, a two-year RCF of US$105 million and a three-year RCF of US$105 million, the filing said.