Moody's gives AB InBev a sobering Baa1 rating, 3 steps from junk

Anheuser-Busch InBev’s credit rating was cut to the lowest tier of investment grade by Moody’s Investors Service. File Photo: IOL

Anheuser-Busch InBev’s credit rating was cut to the lowest tier of investment grade by Moody’s Investors Service. File Photo: IOL

Published Dec 12, 2018

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INTERNATIONAL – Anheuser-Busch (AB) InBev’s credit rating was cut to the lowest tier of investment grade by Moody’s Investors Service, which warned that the brewer was struggling to whittle its $100 billion (R1.4 trillion) debt load. 

Moody’s lowered AB InBev’s senior unsecured debt ratings to Baa1 from A3, putting the world’s largest beer-maker three steps from junk, the ratings firm said on Monday. 

The brewer’s borrowings will remain high relative to its cash flow for the next few years – even after it decided to slash dividend payouts to shareholders by half. 

Plunging emerging-market currencies have sapped profits for the beer giant, leaving the company’s debt at about five times earnings before interest, taxes, amortisation and depreciation, Moody’s said. 

AB InBev, based in Leuven, Belgium, has the biggest debt load in the global food and drink industry. 

“Deleveraging is behind original expectations due largely to foreign currency fluctuations and underperformance of certain emerging economies,” Moody’s analysts said. AB InBev’s liabilities mushroomed as part of its 2016 acquisition of SABMiller. 

BLOOMBERG 

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