Olam International announced on September 28, that it has secured a club loan pegged to the Singapore Overnight Rate Average (SORA) with DBS Bank and Industrial and Commercial Bank of China (ICBC) for $200 million.

The one-year committed revolving credit facility gives Olam the option to enter into a SORA cross-currency swap with DBS at the start of each interest period, which gives the group added certainty on interest rates and swap proceeds in SGD to the USD.

The SORA-pegged loan, which is the first in Singapore and the agri-business industry, marks another milestone in Singapore’s transition towards adopting SORA as the new interest rate benchmark for the Singapore dollar cash and derivatives market.

The loan is undertaken by Olam and its wholly-owned subsidiary Olam Treasury. Its interest rate comprises two components – a compounded daily SORA rate calculated in arrears and an applicable margin.

Proceeds from the loan will be applied towards general corporate purposes of Olam and its subsidiaries. DBS and ICBC have been appointed mandated lead arrangers and DBS is the sole bookrunner and facility agent for the loan.

Shares in Olam closed 2 cents higher, or 1.6% up, at $1.26 on September 25.