Dairy Board secures five-year €420m deal with banks at home and abroad

The Irish Dairy Board has secured a five-year, €420m syndicated bank facility with AIB, Bank of America Merrill Lynch, Barclays, HSBC, Rabobank, and Ulster Bank.

This deal replaces the IDB’s existing €350m three-year facility with the same banks.

The IDB and its industry partners will use the war-chest to fund their domestic and international growth ambitions aligned to the removal of milk quotas in 2015. The new facilities are already over-subscribed.

Group finance director Donal Buggy said: “The new facilities strengthen our capital structure and enhance the operational flexibility of the IDB by extending the maturity profile of our debt for five years to February 2019 on competitive terms.

“It also gives us the opportunity to make further acquisitions or other strategic investments on our journey to providing routes to market and superior returns for Irish dairy farmers.”

The deal features a €165m syndicated loan facility (including €30m of ancillary facilities) to fund IDB’s working capital requirements and its international growth strategy. This facility replaces the existing €160m facility.

It also includes a €255m syndicated, reverse-invoice discounting facility to fund the working capital requirements of members. This replaces the existing €190m facility.

The reverse-invoice discounting facility is intended to give IDB members extra funding for the abolition of milk quotas in April 2015.

A further €50m will be made available to IDB members, if required, by way of an uncommitted tranche of funding. This will bring the total reverse-invoice discounting fund to €305m.

Mr Buggy said: “The successful refinancing demonstrates the strong support that exists amongst our participating banks for both the IDB and the Irish dairy industry generally.”