Olam Bonds Updated

With reference to Olam’s USD 7.5% 2020 paper, I see an announcement on the Change of Control put. There is another announcement on the USD convertible bonds too. No new developments on the SGD issues yet.

The following is an excerpt of the announcement on SGX on the USD paper.

Following the occurrence of a Change of Control, holders of Bonds have the right, at such holder’s option, to require the Issuer to redeem all or some only of their Bonds (the “Change of Control Put Option”) on the Change of Control Redemption Date referred to below at 100 per cent. of their principal amount together plus unpaid accrued interest (calculated up to but excluding the Change of Control Redemption Date) (the “Change of Control Redemption”).
The relevant details in respect of the Change of Control Redemption are set out below:
1 Change of Control Redemption Date : 9 July 2014
2 Date of Change of Control : 23 May 2014
3 Date by which the Change of Control Redemption Notice must be given (the “Put Option Expiry Date”) : 25 June 2014
4 Redemption Amount : 100 per cent. of the principal amount plus unpaid accrued interest (calculated up to but excluding the Change of Control Redemption Date)
5 Method by which Redemption Amount will be paid :To be paid through Euroclear and Clearstream, Luxembourg
6 Names and Specified Offices of all Paying Agents : The Bank of New York Mellon, London Branch
40th Floor
One Canada Square
London E14 5AL
United Kingdom
Cc: The Bank of New York Mellon, Singapore branch
One Temasek Avenue
#03-01 Millenia Tower
Singapore 039192

Holders of Bonds who wish to exercise the Change of Control Put Option must complete, sign and deposit at the Specified Office of any Paying Agent a duly completed and signed Change of Control Redemption Notice obtainable from the specified office of any Paying Agent together with the Certificate evidencing the Bonds to be redeemed by no later than the Put Option Expiry Date. A Change of Control Redemption Notice, once delivered, shall be irrevocable and may not be withdrawn without the Issuer’s consent and the Issuer shall redeem the Bonds the subject of the Change of Control Redemption Notices delivered as aforesaid on Change of Control Redemption Date.

From Bloomberg.

     May 26 (Bloomberg) — For 6% convertible bonds, note
holders have the choice of converting all or some of their bonds
at S$2.74, Olam says in statement.
• If the company’s conversion date falls within May 26 and June 25 and/or the notes can be redeemed at a price equal to 100% of the principal amount with accrued but unpaid interest
• For bonds due 2020, the holders can redeem their debt at 100% of the principal amount plus unpaid accrued interest.

Note that the put option for the USD paper is OPTIONAL.

OLAM 7.5% 08/2020 USD
Last Bond Price 112 (unverified)
LIFETIME HIGH 112
LIFETIME LOW 83
DEC 2013 CLOSING PRICE 94.25

SGD Olam notes were issued under the 800 mio SGD MTN programme which is different from the USD 2 bio MTN programme.

Thus there is no change of control put option available.

Little chance of puts being exercised with all Olam bond prices higher again.

Coupon Maturity Curr Bid Price Ask Px
6.75 18-Jan USD 105 105
6 Oct-22 SGD 102.4 103.5
5.75 Sep-17 USD 106.3 106.4
5.8 Jul-19 SGD 104.75 105.3
7 PERP SGD 105 105.4
6 Aug-18 SGD 104.1 104.7
7.5 Aug-20 USD 111.6 111.8
6 Oct-16 USD 106.8 107.4