COVID-19: ADM moves to reduce its exposure to risks in volatile market

By Jane Byrne

- Last updated on GMT

© GettyImages/kentoh
© GettyImages/kentoh

Related tags covid-19

Agribusiness giant, ADM, closed a $1.5bn notes offering last week, comprising an $0.5 bn aggregate principal amount of 2.75% notes due in 2025 and an $1bn aggregate principal amount of 3.25% notes due in 2030.

“We’re very pleased with the receptivity to our offer – the capital markets clearly remain confident in ADM’s financial health and strength, a judgement that is backed by our “A” credit rating,”​ Ray Young, CFO, ADM told FeedNavigator.

Explaining the rationale for the move, he noted:

“We have taken a number of steps over the last months to ensure the continued safety, quality and availability of our global supply chain. Since the beginning of this global event, [COVID-19 outbreak] ADM has activated appropriate measures and precautions to protect ourselves, our partners, and our customers while ensuring necessary supplies of our products.

“Last week’s $1.5bn bond issuance contributes to our financial strength in several ways. In particular, it reduces our exposure to rollover risks at a time of volatility in the short-term credit markets, and it gives us additional financial flexibility to continue to invest in our business.”

In terms of what this additional financial flexibility will mean for ADM going forward, he told us:

This action supported our already strong balance sheet and liquidity position, which offer stability, flexibility and security, particularly during more challenging economic and credit market environments. The additional liquidity will help support general operations,”​ said Young.

Coronavirus protocol 

Last week, ADM established a plan ​to address the coronavirus outbreak. Its protocol includes enhancing hygiene at all facilities, thorough cleaning and scaling back on staff working in offices and facilities where possible as well as limiting non-critical travel for employees and contractors along with non-business-critical visits to company locations.

All visitors, including delivery drivers, are being screened for disease symptoms, the company said. Procedures in place to manage the potential exposure of employees or employee partners are based on guidelines from the US Center for Disease Control (CDC).

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