Olam International, a supplier of commodities from coffee to cashews, is planning a benchmark sale of three-year bonds denominated in Singapore dollars, according to a person familiar with the matter.

 

The Singapore-based company hired DBS Group Holdings, HSBC Holdings Plc and Standard Chartered Plc to manage the sale, said the person, who declined to be identified before a public announcement.

 

Olam Chief Executive Officer Sunny Verghese said in an interview in Singapore Jan. 6 that 2010 would be a “massive” year for debt sales and that Olam would be seeking to raise additional longer-term funding to support its acquisition and capital spending plans. On Jan. 12, Olam said it agreed to buy 99.5% of Crown Flour Mills, a Nigerian wheat miller, and other assets for US$107.6 million ($149.7 million).

 

Commodity prices have surged 28% in the past year, spurring Olam, Noble Group and rivals to buy assets before the global economic recovery. Olam announced purchases worth US$1 billion in the past three years as it sought to take advantage of growing demand for coffee, edible oils and sugar.

 

Meetings with investors to market Olam’s Singapore dollar bonds will start on Jan. 22, the person said. The bonds may pay as much as 200 basis points more than the Singapore swap offer rate, the person said. A benchmark sale generally means at least US$500 million.

 

Olam spokeswoman Chow Hung Hoeng couldn’t immediately be reached by telephone in Singapore today.