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Just months after cutting its dividend, Anheuser-Busch InBev found itself under pressure in December from rating agencies who warned that it was not paying enough back its debt, which is now Raises to 109 billion dollars.
As a result, the group entered into action, setting up a debt refinancing facility to repay $ 16.5 billion of matured bonds over the next seven years with cash and a new multi-billion dollar loan much more. late.
Just as when AB InBev raised $ 46 billion in 2016 when the market was liquidated to fund the transaction with SABMiller, investors invested to participate.
Bankers subscribing to the loan of $ 15.5 billion had orders of just under $ 40 billion, according to three people aware of the transaction.
Once again, AB InBev was able to borrow more than initially expected, pointing out that the decline in its price did not reduce investors' appetite for loans to the company.
The transaction will help the company reduce its debt in the coming years and reduce AB InBev's financial obligations in a given year.
The deal was reached last month by Moody's decision to remove the group from its A-minus rating, although rival S & P Global continues to evaluate the A-minus group.
Andrew Forsyth, portfolio manager at BNP Paribas Asset Management, said the warning, coupled with lower prices for some of his bonds, was enough to prompt the company to take action.
"They had been under a lot of pressure," he said. Investors "looked at the credits with decommissioning issues and they [AB InBev] were at the top of the list because their deleveraging strategy was late, "he added.
According to S & P Capital IQ, the company's debt burden is about five times earnings before interest, taxes, depreciation and amortization. This is high for a company with its rating and S & P said that AB InBev should reduce its debt to four times the EBITDA by the end of the year in order to maintain its credit rating.
Rivals such as Diageo and Heineken face much lower debt loads and AB InBev's debt is now well above management's stated commitment to holding approximately twice as much debt as the company.
The sheer size of the company's debt means that it is often among the most liquid corporate bonds. This is why AB InBev has continued to attract bond investors, even though stock fund managers have turned away.
"When you have this amount of debt on your balance sheet, it is your creditors who will allow you to live or die," said Forsyth.
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