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Olam International Raises Debt, Temasek Backs

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Olam International Ltd plans to raise additional capital through a bonds-with-warrants issue. Temasek Holdings owns about 16% of Olam and is the second largest shareholder in the company. Olam will offer US$ 750 million in bonds and up to US$ 500 million in warrants to existing shareholders. Temasek has the potential to raise its position up to 29% over a period of time if other shareholders do not buy in. Olam International Ltd proposed the debt capital raise.

Olam has been challenging Muddy Waters, a short-seller research firm, about a 133-page report detailing aggressive spending, accounting practices and debt levels that may put the firm on the verge of collapse. Olam sued Muddy Waters in a Singapore court and issued a rebuttal saying the firm was not at risk of insolvency and had plenty of liquidity.

“While no business is without risks, we remain comfortable with Olam’s credit position and longer term prospects, and are pleased to have another opportunity to invest in the company, alongside other shareholders,” said David Heng, Senior Managing Director, Investments of Temasek Holdings.

Olam International Ltd Issuance

  • Nominal $750 million – 6.75%, 5-Year Bonds, price at 95% (raising $712.5 million)
  • Attached Warrants – Allow bondholders to buy 387 million shares at $1.291 (raising $500 million if fully exercised)

Saudi Arabia Sends Second Installment of Aid to Pakistan

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On December 14, 2018, Pakistan received its second installment of the US$ 3 billion in aid promised from Saudi Arabia on October 23, 2018. The US$ 1 billion given on December 14th boosted the foreign reserves of the State Bank of Pakistan, which went from US$ 7.2 billion to US$ 8.2 billion. The first installment was given on November 23, 2018. The last installment is expected to occur in January 2019.

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White House Nominates Heath Tarbert for CFTC Chairman

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The White House announced Heath P. Tarbert will be nominated to serve as Commissioner and Chairman of the Commodity Futures Trading Commission (CFTC). Tarbert currently serves as Assistant Secretary for International Markets at the U.S. Treasury Department. Before joining the U.S. Treasury, Tarbert was a Partner at law firm Allen & Overy. Tarbert was confirmed by the U.S. Senate for his current Treasury post at 87 (yes) to 8 (no).

Upon Senate confirmation, Tarbert’s CFTC term would start on April 14, 2019 and last for five years. Tarbert is taking over from J. Christopher Giancarlo whose term ends in April 2019. Tarbert will need a U.S. Senate confirmation to take the head CFTC post.

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KIA Could Sell Stake in North Sea Energy Business

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The Kuwait Investment Authority (KIA), through its unit Wren House Investment Management, is nearing a deal to sell a 40% stake in its North Sea energy business to JPMorgan Asset Management. In July 2018, KIA closed on a deal to acquire oil and gas pipeline firm North Sea Midstream Partners from ArcLight Capital.

More details to follow –

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