AB InBev completes takeover loan refinancing
The move came as highly-rated blue-chip corporate borrowers take advantage of lower loan pricing and longer five-year loan tenors to cut borrowing costs and stretch the maturity of their debt.
AB-InBev will take about USD 150 million in mark-to-market downward adjustments in both the first and second quarter this year as an interest rate swap on part of the original facility would no longer be effective, the company said.
The brewer’s finance costs in the first and second quarter this year would include incremental non-cash accretion expenses of USD 29 million and USD 157 million, respectively.
The refinancing not only gives AB-InBev a better, lower rate on its debt, it also extends the timeline for the payback. Initially, this debt was due in two big piles: one next year, one in three years. With this new loan, AB-InBev pushed that timeline out — and at a lower overall rate.
In December 2009, AB-InBev said a USD 13 billion tranche C which matures in November 2011 had been reduced to USD 5.2 billion, and a USD 13 billion D tranche maturing in November 2013 had been reduced to USD 12 billion.
