Olam International

[tanjm]

Not worried about interest rates because of the 5y duration and the current 8% ytm. But thanks yeokiwi for this snippet. So the junk bond yield might not be entirely unjustified ... Though you could argue that with a larger amount at stake, Temasek might be more handcuffed to this one.

[Nick]

If you live in Singapore, forex risk may be an issue since the bond par value and interest payment are priced in USD.

[RBM]

Hello tanjm,

The latest prices I have for Olam’s bonds are as follows – this excludes brokerage and the fat mark-ups that some of the private bank units can tend to apply....................

OLAMSP 6.3/4% 01/29/18 SGD.....94.75
OLAMSP 6% 10/25/22 SGD...........92.00
OLAMSP 5.3/4% 09/20/17 USD.....93.80
OLAMSP 2.1/2% 09/06/13 SGD.....99.80
OLAMSP 5.8% 07/17/19 SGD........94.00
OLAMSP 6% 08/10/18 SGD...........92.50
OLAMSP 7.1/2% 08/12/20 USD.....95.50
OLAM 7% Perpetual SGD..............90.00

As you will see, they are all trading below par, by varying degrees - the (ongoing) Muddy Waters episode hit hard, particularly the longer tenor stuff. Excluding brokerage, the 6.3/4% SGD Jan 2018 bond (and it is S$, not US$ according to my understanding) indeed has a yield-to-maturity of ~ 8% …………. but it has almost 5 years left to run…….. and therein lies the risk. Comparing the YTM’s of these Olam bonds, it strikes me that indeed the one you have singled-out has the highest YTM ………….. but are the terms (e.g. subordination, ranking etc. etc.) of this debt paper inferior to the other bonds?? I would respectfully suggest you look carefully at the detailed terms of the specific debt paper you are considering – usually there is good reason for higher YTM’s (and usually it is a higher degree of risk in one way, shape or form).

P.S. – One other recommendation: Don’t do what I did ………….. i.e. don't invest in the Perpetual.

Not worried about interest rates because of the 5y duration and the current 8% ytm. But thanks yeokiwi for this snippet. So the junk bond yield might not be entirely unjustified ... Though you could argue that with a larger amount at stake, Temasek might be more handcuffed to this one.

[RBM]

Latest prices for the Olam Bonds are as follows...........

OLAMSP 6.75% 01/29/18,.... USD 94.52
OLAMSP 6.00% 10/25/22,.... SGD 90.00
OLAMSP 5.75% 09/20/17,.... USD 93.75
OLAMSP 2.50% 09/06/13,.... SGD 99.80
OLAMSP 5.80% 07/17/19,.... SGD 93.85
OLAM PERPETUAL 7%,..........SGD 90.00
OLAMSP 6.00% 08/10/18,.....SGD 96.00

tanjm - if anything the price of the 6.75% p.a. coupon 01/29/18 bond that you have your eye on has softened a tad in the last couple of days.

Vested - in Olam Perpetual Bond

[CityFarmer]

This is definitely a wise move to strengthen the balance sheet by divested some of the asset. US$14.5 mil being monetized, and above the book value, not too bad... IMO

(not vested)

OLAM INTERNATIONAL SELLS ITS BASMATI RICE MILLING FACILITY IN INDIA TO EBRO FOODS

http://info.sgx.com/webcoranncatth.nsf/V...C0083CA76/$file/13Mar2013-Divestment_India.pdf?openelement

Singapore, March 13, 2013 – Olam International Limited (“Olam”), a leading global, integrated
supply chain manager and processor of agricultural products and food ingredients, announced
today that it has sold Taraori Rice Mills Private Limited, the holding company for its rice milling
assets in India, to Spanish rice and pasta manufacturer, Ebro Foods, for US$14.5 million. The
basmati rice mill, located in Haryana, India was acquired in 2008 and has a processing capacity
of 18 tonnes of paddy per hour.

[CityFarmer]

It seems the saga is over, and life as usual...

Olam shares top level last reached before Carson Block attacked

Olam International, the commodity trader targeted by short-seller Carson Block, rebounded in Singapore, topping the price before the founder of Muddy Waters LLC said he was betting against the company.

The stock rose 1.5% to $1.745 at 9:13 a.m. local time. Shares of Singapore-based Olam, which rejected Block’s claims and sued for defamation, closed at S$1.74 on Nov. 19 before Block questioned the company’s accounts at a London conference.

The rebound shows returning confidence among investors after the shares slumped 20% following Block’s allegations in November. Olam, whose largest shareholder is Singapore’s state investment firm Temasek Holdings Pte, will in April present the results of a review of its businesses.

http://www.theedgesingapore.com/the-dail...acked.html

[RBM]

For the holders of Olam's equity shares that may be the case CityFarmer ............. but it certainly is NOT the case for Olam's bond holders. The prices of Olam's debt paper, particularly the longer tenor paper, are way down as compared to where they were before Muddy Waters made their pitch.

Vested - in Olam Perpetual Bonds

It seems the saga is over, and life as usual...

Olam shares top level last reached before Carson Block attacked

Olam International, the commodity trader targeted by short-seller Carson Block, rebounded in Singapore, topping the price before the founder of Muddy Waters LLC said he was betting against the company.

The stock rose 1.5% to $1.745 at 9:13 a.m. local time. Shares of Singapore-based Olam, which rejected Block’s claims and sued for defamation, closed at S$1.74 on Nov. 19 before Block questioned the company’s accounts at a London conference.

The rebound shows returning confidence among investors after the shares slumped 20% following Block’s allegations in November. Olam, whose largest shareholder is Singapore’s state investment firm Temasek Holdings Pte, will in April present the results of a review of its businesses.

http://www.theedgesingapore.com/the-dail...acked.html

[CityFarmer]

For the holders of Olam's equity shares that may be the case CityFarmer ............. but it certainly is NOT the case for Olam's bond holders. The prices of Olam's debt paper, particularly the longer tenor paper, are way down as compared to where they were before Muddy Waters made their pitch.

Vested - in Olam Perpetual Bonds

Is there a theory to explain that?

Is it due to differences in targeted investor groups?

[CityFarmer]

Olam opens A$60 million almond processing plant in Victoria, Australia

Australia, March 26, 2013: Olam International Ltd today announced the opening of its A$60 million almond hulling and processing plant, the largest facility of its kind in the southern hemisphere, in Carwarp, Victoria.

The 12,000 square metre facility was formally opened by Olam Group’s MD and CEO, Sunny Verghese, accompanied by Victorian Deputy Premier, Peter Ryan and Olam Australia Executive Director and Country Head, Bob Dall’Alba.

The plant is expected to de-hull and shell 14 tonnes of almonds per hour and employ approximately 19 permanent staff and 54 casual positions once in full production.

http://info.sgx.com/webcoranncatth.nsf/V...A002F555C/$file/26Mar2013-AlmondPlantOpening.pdf?openelement

[a74henry]

Olam opens A$60 million almond processing plant in Victoria, Australia

Australia, March 26, 2013: Olam International Ltd today announced the opening of its A$60 million almond hulling and processing plant, the largest facility of its kind in the southern hemisphere, in Carwarp, Victoria.

The 12,000 square metre facility was formally opened by Olam Group’s MD and CEO, Sunny Verghese, accompanied by Victorian Deputy Premier, Peter Ryan and Olam Australia Executive Director and Country Head, Bob Dall’Alba.

The plant is expected to de-hull and shell 14 tonnes of almonds per hour and employ approximately 19 permanent staff and 54 casual positions once in full production.

http://info.sgx.com/webcoranncatth.nsf/V...A002F555C/$file/26Mar2013-AlmondPlantOpening.pdf?openelement

Once production starts, the cashflow will start to contribute depending on the credit terms to its customers.