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AB InBev lining up expected record mega-bond
(Fixes typo in graf 8)
By Davide Scigliuzzo
NEW YORK, Jan 11 (IFR) - Beer giant AB InBev was holding its
first investor calls Monday to line up the sale of what could be
the largest bond ever sold, part of the financing for its
purchase of SABMiller (Xetra: BRW1.DE - news) .
Sources told IFR that the maker of Budweiser, Stella Artois
and Corona hired Bank of America Merrill Lynch, Barclays (LSE: BARC.L - news) and
Deutsche Bank (Other OTC: DBAGF - news) to arrange calls Monday and Tuesday.
Market participants expect the bond to be anywhere between
US$30bn and US$60bn, which could top the current record-holder,
a US$49bn deal from Verizon (NYSE: VZ - news) in 2013.
Through the bond deal, AB InBev is expected to take out
US$30bn of bridge loans it received last year and a portion of
the US$35bn in term loans that were part of the same bank
financing.
Even (Taiwan OTC: 6436.TWO - news) at the low end of estimates, the deal would be the
second-largest corporate bond issue ever, ahead of the US$21bn
sold by Actavis last year to help fund its takeover of Allergan (NYSE: AGN - news) .
It (Other OTC: ITGL - news) is still unclear whether AB InBev will opt to raise all
the funds in US dollars or might include tranches in euros or
other currencies.
One banker said that even if the company were to raise the
entire amount in US dollars, a strong marketing effort in Europe
would not be unusual for a deal of this size.
"For something like this, 25% of the book could be European
accounts," said the banker.
Market participants say that if market conditions remains
supportive, a formal announcement could be expected as soon as
Tuesday or Wednesday.
"Usually you don't see calls unless they are going to do a
deal," one buyside trader said. "They can prime everybody now
and move fast."
US companies have rushed to the bond markets to finance
acquisitions and share buybacks, selling a record US$1.269trn of
new bonds in 2015, and there is an estimated US$200bn pipeline
of M&A bond financing in the works for 2016.
AB InBev, rated A2 by Moody's and A- by Standard & Poor's,
has backed its US$100bn-plus bid for SABMiller with a record
US$75bn syndicated loan, TRLPC reported in November.
The company's vice president for treasury, risk management
and financial markets, Fernando Tennenbaum, and director of
funding Matt Amer will host the calls.
LARGEST INVESTMENT-GRADE BONDS EVER
DATE ISSUER AMOUNT
($,bn)
09/11/13 Verizon 49
03/03/15 Actavis 21
04/23/15 AT&T (Sao Paolo: ATTB34F.SA - news) 17.5
04/30/13 Apple (LSE: 0R2V.L - news) 17
12/01/14 Medtronic (Xetra: 2M6.DE - news) 17
05/05/15 AbbVie (LSE: 0QCV.L - news) 16.7
12/09/15 Visa (Xetra: A0NC7B - news) 16
07/09/15 Charter Communications (NasdaqGS: CHTR - news) 15.5
07/13/15 CVS Health 15
11/05/12 AbbVie 14.7
09/30/15 Hewlett-Packard 14.6
02/18/09 Roche 13.5
03/17/09 Pfizer (NYSE: PFE - news) 13.5
10/29/15 Microsoft (NasdaqGS: MSFT - news) 13
04/30/14 Apple 12
05/13/13 Petrobras 11
03/13/02 GE Capital 11
02/09/15 Microsoft 10.75
07/20/15 UnitedHealth Group (Swiss: UNH.SW - news) 10.5
05/09/01 Worldcom 10.1
09/09/15 Gilead Sciences (NasdaqGS: GILD - news) 10
06/23/15 HJ Heinz 10
05/13/15 Qualcomm (Hanover: QCI.HA - news) 10
05/06/15 Shell (LSE: RDSB.L - news) 10
12/05/00 British Telecom 10
04/28/15 Oracle (Hanover: ORC.HA - news) 10
06/30/14 Oracle 10
(Reporting by Davide Scigliuzzo; Additional reporting by Laura
Benitez; Writing by Marc Carnegie; Editing by Natalie Harrison)
