Banks Look To Tap Investors For InBev
August 26, 2008
A bank consortium has begun marketing part of a $45 billion credit facility for Belgian beer company InBev to help finance its acquisition of the iconic U.S. brewer Anheuser-Busch. The deal could act as a sobriety test for the leveraged loan market, providing an indication of the how much it is able to absorb.
The banks—Bank of Tokyo-Mitsubishi, Barclays Capital, BNP Paribas, Deutsche Bank, Fortis, ING, Mizuho, the Royal Bank of Scotland and Santander—have structured the $45 billion facility as a $7 billion one-year bridge loan that is to be repaid by asset disposals, a $12 billion one-year bridge loan that is to be repaid by capital market issues, a $13 billion three-year term loan and a $13 billion five-year term loan.
Price talk and the breakdown of the term loans could not be determined, and calls to the banks were not returned by press time. The average margin on such deals has been roughly Libor plus 279 bps, according to Dealogic.
Each arranger will hold as much as $3.3 billion after syndication and has tapped other banks for the senior portion of the deal, asking those backers to commit $1.75 billion each. In return for such a stiff commitment, the arrangers have offered senior lenders initial interest of roughly Libor plus 175 bps, a high mark considering where deals have been pricing.
The average price for a BBB- rated deal has been around Libor plus 125 bps, while a deal rated A- has been around 60 bps, according to Reuters Loan Pricing Corp. InBev is rated BBB+ by Standard & Poor’s.
InBev agreed to buy St. Louis-based Anheuser-Busch, brewer of Budweiser, Michelob and Rolling Rock, for $49.9 billion, creating the world’s biggest brewer.
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