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$75Bln Going Unnoticed

12 November 2015 by lberuti

Yesterday ABIBB ( Anheuser Busch Inbev SA ) made a formal $107bln offer to buy SABLN ( SABMiller plc ), sealing a long anticipated deal that combine the world’s biggest brewers to form a company that will have the number one or two position in 24 of the world’s 30 biggest beer markets according to analysts. To back the acquisition, ABIBB said it obtained the biggest corporate loan on record, $75bln. In the future part of the loans will be replaced by bonds, and the brewer is said to be planning to sell $55bln of bonds across multiple currency and maturities. When it happens, this sale will also be a record. It will exceed the $49bln of bonds that VZ ( Verizon Communications Inc ) issued two years ago to fund its buyout of VOD’s ( Vodafone Group plc ) stake in a wireless venture. But while in September 2013, VZ’s 5 year risk premium jumped 30bps from 70 to 100bps when the jumbo deal was announced, ABIBB’s 5 year risk premium hardly moved at all. It widened today by 2bps to 81bps, which is merely in line with the rest of the market ( iTraxx Main, the barometer of European investment grade credit, widened 3bps to 73.5bps).