AB InBev in biggest bond sale to refinance $100bn debt
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CAPE TOWN – Anheuser-Busch (AB) InBev is staging one of the biggest bond sales of the new year to refinance some of its $100 billion (R1.4 trillion) debt load, according to a report by Bloomberg.
The financial, data, and media company reported on Thursday that the brewer was planning to sell senior unsecured bonds in six parts, citing a source with knowledge of the matter.
The sale comes in tandem with a tender offer for up to $11 billion of notes in 12 series, according to a statement Thursday. The longest portion of the offering, a 40-year security, may yield 2.9 percentage points more than the US, according to the report.
AB InBev made headlines in 2016 when it took over SABMiller for $100bn to form a behemoth that would sell more than a quarter of all beers sold worldwide and be the fifth largest consumer goods company.
The deal was overwhelmingly backed by SABMiller shareholders.
AB InBev’s Zimbabwe unit Delta Beverages also made headlines recently when said it had abandoned a plan to only accept hard currency payments to cope with a crippling shortage of US dollars, after the government intervened.
Delta Beverages had previously announced that it would only take payments in US currency and would no longer accept electronic dollars known as “Zollars”, or a quasi-currency known as “bond notes”, amid a severe shortage of hard currency in Zimbabwe.
However, the country’s commerce minister later said that the government opposed the plan and Delta scrapped the plan.
According to the Bloomberg report, the bond sale will not only be a test for the investment- grade bond market, where risk premiums have generally been on the rise but also for AB InBev, whose credit ratings have faltered of late.
Moody’s Investors Service downgraded the company last month, citing slow progress in deleveraging following the acquisition of SABMiller in 2016.
AB InBev shares closed 0.74 percent lower on the JSE on Thursday at R968.