SINGAPORE (July 14): Olam International is to issue US$500 million (S$674 million) of perpetual capital securities under its US$5 billion Euro Medium Term Note (EMTN) Programme.

According to Olam’s CFO, Neelamani Muthukumar, the deal represents the “largest ever US$ perpetual offering by a Singapore-based issuer”.

In a Wednesday statement, Olam adds that the transaction is in line with the group’s strategy of “actively managing its capital structure in a cost effective manner”.

The agri-business also announced that it has also successfully priced the issuance following an intraday book-building exercise, which Olam says attracted over 115 investors to place orders such that the issuance was about 3.4 times oversubscribed.

The securities were priced at par and bear a distribution rate of 5.35% for the first five years, below the initial pricing guidance. The rate will then be reset at the end of five years from the issue date and each date falling every five years thereafter.

Olam may also choose to redeem the capital securities in whole on or after the fifth anniversary of the issue date.  

Approximately 91% of the capital securities were allocated to Asian investors, with the remainder allocated to European investors. Aside from demand from private banking accounts, institutional investors such as fund managers and banks were collectively allocated 46% of the issuance.

“We are extremely pleased by the broad-based participation by both institutional investors and private banks that resulted in a significantly oversubscribed order book,” says Muthukumar.

Olam closed 1.07% higher on Wednesday at S$1.89.