DBS Bank and Wilmar International have signed a $200 million corporate loan agreement pegged to the Singapore Overnight Rate Average (SORA) on August 27.
The loan facility’s interest rate, which references SORA, comprises a compounded daily SORA rate calculated in arrears and an applicable margin.
At the start of each interest period, Wilmar will also have the option to enter into a SORA interest rate swap (IRS) to give certainty of interest rates.
This is the agri-business industry’s first SORA loan coupled with an IRS.
Charles Loo, Wilmar’s Chief Financial Officer, said that it is in Wilmar’s DNA to be entrepreneurial and innovative.
“We are delighted to have partnered DBS to support Singapore’s transition to new benchmark interest rates with this new SORA facility. Wilmar’s SORA-based loan, a first for the agribusiness industry, will put us in good stead to ride the wave of interest rate reforms and drive better understanding and greater adoption of risk-free rates in general, which is more stable and robust.”
“Forward-looking companies like Wilmar are positioning themselves for the future by tapping SORA financing early. This means that they will have a greater understanding of how SORA works and will be at the forefront of innovative SORA-based financing solutions as market adoption increases,” says Tan Su Shan, group head, institutional banking group at DBS
Shares in Wilmar closed flat at $4.35 on August 26.
