Olam issues new 1.2821% bonds for another $21.2 million of 1% convertibles

By Jennifer Chiou

New York, March 27 - Olam International Ltd. announced that it will issue $16.54 million of new U.S. dollar-denominated 1.2821% convertible bonds due July 3, 2013 in exchange for $21.2 million more of its 1% convertible bonds due July 3, 2013.

The company entered into agreements with certain noteholders, and they will receive new notes on the same terms as Olam's previous exchange offer.

On March 4, the company said it issued $106.08 million of the new 1.2821% convertibles in exchange for the $136 million of its $176.4 million outstanding 1% convertibles that was tendered for exchange in a February offer. Olam has now issued $122.62 million total of new bonds.

Holders will receive a principal amount of new convertibles equal to 78% of the principal amount of 1% convertibles accepted for exchange. Accrued cash interest will not be paid.

The purchased bonds have been canceled.

As already noted, the new convertibles' redemption amount at maturity will be 151.5.

The conversion price of the new convertibles is S$1.656 per share, which is a 20% premium to Feb. 13's closing share price of S$1.38.

The conversion ratio is 90,984.3 shares per bond. The ratio is based on a face amount of $100,000 per convertible and a fixed exchange rate of 1.5067 Singapore dollars per U.S. dollar.

The new convertibles will be putable at 141.025 on July 3, 2011.

Olam can force conversion of the new convertibles at any time between July 3, 2010 and July 3, 2011 if the volume-weighted average price of its shares, translated into U.S. dollars at the prevailing rate, is at least 140% of the early redemption amount of the new convertibles divided by their conversion ratio for 20 consecutive trading days.

After July 3, 2011, the company can force conversion if its volume-weighted average share price is 130% of the early redemption amount divided by the conversion ratio for 20 consecutive trading days.

The company can issue shares in lieu of cash at maturity and to satisfy any puts exercised.

The company originally issued $300 million of the 1% convertibles in July 2008. It repurchased $117.6 million of them at 65 during a tender offer that expired on Dec. 19, and $19.2 million of the bonds remains outstanding.

Olam is a Singapore-based provider of supply chain management for agricultural products and food ingredients.

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