16 de septiembre de 2015 / 13:56 / en 2 años

LPC-AB InBev raises lenders' hopes for jumbo financing

LONDON, Sept 16 (Reuters) - The European loan market is pinning its hopes on a potential jumbo loan financing backing the merger of the world’s largest brewer AB InBev and SABMiller, almost a year since the merger was last seriously considered, banking sources said.

The potential financing will be welcomed with open arms by European syndicated loan desks, many of which were set stiff budgets this year in expectation of a return of big-ticket European M&A. However, global volatility and poor growth expectations have hit borrower confidence and the level of European M&A financing this year has been disappointing.

“Let’s hope this goes through. It could just about save our year,” a senior loans banker said.

AB InBev will have to pay at least 40 pounds ($62) per SAB Miller share, and maybe as much as 45 pounds, according to analysts - implying an overall price of up to US$130bn, including SABMiller’s debt, Reuters reported.

The potential financing, which could cover an estimated US$90bn-plus cash portion of an offer, is likely to include a large bridge loan element to be refinanced in the bond market and possibly in the loan market. Any deal would benefit from deep loan market liquidity, the bankers said.

“This has been something that has been contemplated for a long time by most of AB InBev’s relationship banks. Although the figure considered is staggering, given where bank liquidity is at the moment, it is fully financeable in the bank market,” the senior banker said.


Last year, when the mega merger was last mooted, bankers speculated that the company could seek to raise a bridge loan of US$75bn-US$80bn before issuing US$72bn-US$110bn of bonds to fund an acquisition.

A new financing would help soak up excess liquidity in the loan market, while potential asset sales could generate more M&A for banks to work on, helping banks to make budget.

“Banks are underlent, there is an unprecedented amount of liquidity in the system. Looking at what is possible in terms of deal size, for a bridge loan for the right borrower, the sky really is the limit,” another banker said.

AB InBev has targeted a net debt to Ebitda of 2 times, from around 2.5 times, Reuters reported, it is likely to reach that by 2016, the earliest any deal could realistically be completed, and so has room to borrow to fund a takeover. When it bought Budweiser-maker Anheuser-Busch in 2008, it allowed the ratio to rise to beyond 5 times. If it was prepared to go that high again, it might be able to raise as much as US$100bn in debt.

The size of the financing required could see AB InBev go beyond is closest relationship banks and tap the wider bank market.

Mandated lead arrangers and bookrunners on AB InBev’s US$9bn revolving credit facility arranged in August included Banco Santander, Bank of America Merrill Lynch, Bank of Tokyo-Mitsubishi UFJ, BNP Paribas, Deutsche Bank, ING, JP Morgan, Mizuho Bank, Royal Bank of Scotland, Societe Generale and SMBC, according to Thomson Reuters LPC data. ($1 = 0.6469 pounds) (Editing by Christopher Mangham)

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