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Dairy Board’s corporate loan facility scoops prestigious award
By Joe Dermody
Specialist financial services sector journal Finance Dublin has selected Irish Dairy Board’s innovative new €190m corporate loan facility among its prestigious award winners for 2012.
The IDB won the ‘Loans and Financing Deal of the Year’ category, one of nine awards selected by Finance Dublin — widely referred to as the bible for financial services professionals seeking analysis of quoted securities and IFSC-related information.Glanbia won the magazine’s ‘Debt Securities Notes’ award for its $325m guaranteed senior notes private placement (securing the equivalent of almost €260m in 10-year notes with Barclays and RBS). For its ‘Most Innovative’ award, Finance Dublin selected the financial restructuring of Quinn Group and the sale of Quinn Insurance while under administration. Other awards went to Alkermes, Avolon, Northern Ireland Electricity Finance, Fairfax Holdings, IFSC, and AIB.
Unveiled in January, the IDB’s reverse invoice discounting (RID) facility has provided its members with an extra €50m and greater security of funding, replacing the previous uncommitted working capital funding lines. This facility, in addition to providing extra funding, resulted in a total financing package of €350m for the IDB.
Under the deal, Rabobank is the lead bank and arranger of the RID, a committed syndicated loan created to give Ireland’s dairy sector security for post-2015 expansion planning. The deal effectively transforms IDB from being a banker to the IDB’s co-operative owners, into a facilitator; this allows for the separation of the dairy board’s working capital and structural financing.
IDB financial director Cathal Fitzgerald said: “IDB were pleased to complete the deal in such a difficult market with a strong panel of banks giving a major boost to IDB and the Irish dairy sector at a time when it is gearing up for the first major expansion in over 30 years when quotas are set to be abolished post-2015.”
The €190m funding structure is the first of its kind in Ireland and involves IDB’s members. As the deal involved a large number of parties it would have required a more-than-usually complex negotiation process.
It is the first deal of its type to be syndicated on a funded basis to an international banking group. Rabobank Ireland CEO Kevin Knightly said: “This transaction is an innovative structure for funding the Irish dairy industry.”
Meanwhile, Glanbia’s near €260m equivalent issuance of 10-year notes with Barclays and its joint placement agent Royal Bank of Scotland also came in for special praise from the judges. The use of proceeds for this transaction included the refinancing of existing US dollar debt and for use in general corporate purposes.
Angus Whelchel, managing director of private capital markets in Barclays, said: “Given the company decided to move forward with a transaction early in 2011, Barclays was able to get a lot of focus and momentum from investors which helped to book build. Additionally, the fact that the company made themselves available for investor ques-tions during the marketing helped very much in driving home the merits of the deal.
“The company was able to execute at very attractive pricing with a select group of very strong international institutional investors in good size. The transaction also benefited from a delay settlement which helped the company to tailor the drawdown of funds to their specific needs thus helping to mitigate overall financing costs. Lastly, the deal provided an efficient outlet for the company to access US dollars and a new investor base which allowed the client to further diversify its investor base while helping to lengthen the maturing profile of the company’s debt all at the same time.”