Bunge unit issues US$1bil debt notes to buy stake in IOI Loders

PETALING JAYA: Bunge Ltd’s unit, Bunge Limited Finance Corp, has issued US$1bil of debt notes for the purchase of a 70% ownership interest in IOI Loders Croklaan Group BV from IOI Corp Bhd.

According to a statement posted on its website, Bunge Limited had priced a public offering of US$400mil aggregate principal amount of 3% senior notes due 2022 and US$600mil aggregate principal amount of 3.75% senior notes due 2027.

The senior notes will be guaranteed by Bunge Limited. The transaction is expected to close on Sept 25, 2017.

“Bunge Limited intends to use the net proceeds from this offering to finance its previously announced acquisition of a 70% ownership interest in Loders. Pending the closing of the acquisition, Bunge intends to use the proceeds to repay outstanding indebtedness,” it said.

Last week, IOI Corp announced the pro- posed disposal of a 70% controlling stake in its Netherlands-based palm oil refinery Loders for RM3.94bil to Bunge while retaining a 30% stake in Loders.

IOI Corp had bought Loders, one of Europe’s leading global suppliers of specialty oils and fats to the processed food industry, from Unilever in November 2002 for RM814mil.

Moody’s Investors Service has cut its outlook for Bunge and cautioned that without much improved earnings, it could cut the US agribusiness’ credit rating to just a step above junk status.

The agency has revised Bunge’s outlook from stable to negative after it opened a US$900mil credit facility to help fund a deal for the Loders stake.

Moody’s has maintained Bunge’s Baa2 longterm debt rating, but warned that without improved operating performance and cash flow, the company risks a downgrade to Baa3, one notch above junk.