London - Anheuser-Busch (AB) InBev sold a record amount of corporate bonds in euros to raise funds for the takeover of SABMiller.
The biggest brewer issued e13.25 billion (R228.11bn) of notes in six parts, according to data compiled by Bloomberg. The deal follows a $46bn (R703bn) bond sale in January, which was also to back the $110bn SABMiller purchase.
The maker of Budweiser is taking advantage of increased demand for investment-grade debt in euros after the European Central Bank (ECB) announced plans to start buying non-bank corporate bonds last week.
The ECB move has spurred a flurry of sales and helped drive down borrowing costs for highly rated borrowers to the lowest since June.
“They’re getting their timing bang on,” said Luke Hickmore, an Edinburgh-based senior investment manager at Aberdeen Asset Management, which manages about £291bn (R6.4 trillion).
“Books have been very large for these kind of deals all week, and they’ve priced it at a very sensible level to make sure they get the size done.”
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Officials at Leuven, Belgium-based AB InBev declined to comment on the sale.
The offer surpassed Roche Holding’s e9.75bn sale in 2009, the record for a corporate issue in the single currency. The brewer’s issuance of dollar bonds in January trailed Verizon Communications’ record $49bn sale in 2014.
The company arranged a record $75bn loan in November to help fund the SABMiller acquisition, including $30bn of bridge loans and $25bn of three-year term loans. It is buying SABMiller to gain greater access to emerging markets, including Latin America and Africa.
The companies have agreed to sell stakes in ventures in the US and China to help secure regulatory approval for the combination.
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AB InBev’s euro sale included e1.25bn of four-year floating-rate notes, and e1.75bn of fixed-rate notes with the same maturity. There were also e2bn of six-year notes, e2.5bn of nine-year bonds, e3bn of 12-year securities and e2.75bn of 20-year notes, according to the data.
The 20-year bonds pay 170 basis points above benchmark rates, narrower than the initial terms. That still surpasses yield premiums of about 130 basis points for similar maturity investment-grade eurobonds issued by food maker Mondelez International and phone company AT&T.
There was “clear value” in the 20-year AB InBev securities, Hickmore said. Including the AB InBev deal, investment-grade non-financial companies have issued about e21bn of debt this week.
BLOOMBERG