| NEW YORK, April 4
NEW YORK, April 4 Constellation Brands
launched $2.49 billion in credit facilities at a bank meeting
earlier today to back its $4.75 billion acquisition of the
Corona and Modelo brand licenses and a stake in Crown Imports
LLC from Anheuser-Busch InBev, sources told Thomson
The loans consist of an $850 million revolving credit
facility, a $516 million term loan A, a $247 million U.S. Term
loan A-1, a $575 million term loan A-2 and a $300 million
European term loan A.
A separate $1.2 billion European term loan B will be
launched to institutional investors shortly.
The loans will be used to take out a $4.75 billion bridge
loan the company obtained in February to back the acquisitions.
Bank of America Merrill Lynch, JP Morgan, RaboBank, Barclays,
and CoBank are jointly leading the loans.
The $300 million European term loan A and the $1.2 billion
European term loan B will constitute new money to the company.
Meanwhile, banks are being asked to renew their lending
commitments to the pre-existing $850 million revolver, $516
million term loan A, $247 million U.S. Term loan A-1 and $575
million delayed-draw TLA-2. The company originally entered into
these loans in 2012.
To complete the Crown-Modelo acquisition, the company also
expects to sell $1.65 billion in bonds and use $370 million of
cash on hand and accounts receivable securitization borrowings.
The revolver, term loan A, TLA-2 and European term loan A
will mature five years after the acquisitions close. The TLA-1
and European TLB will mature in six years and seven years,
Pricing on the revolver, term loan A, TLA-2 and European
term loan A will initially be set at LIB+200. Pricing on the
TLA-1 will initially be set at LIB+225.
The TLA, TLA-2 and European TLA will amortize at a rate of 5
percent per year during the first two years, 10 percent in years
three through five with the balance due at maturity. The TLA-1
and European TLB will amortize at a rate of 1 percent per year
with the remaining balance due at maturity.
Financial covenants will include a maximum total leverage
covenant of 5.75 times in the first year and a step down to 5.5
times thereafter. A minimum interest coverage covenant of 2.5
times will also apply.
Lender commitments to all but the European term loan B are
due April 18.
On February 14, Anheuser-Busch InBev said that it would sell
Compania Cervecera de Coahuila, Grupo Modelo's brewery in
Piedras Negras, Mexico, and the Corona and Modelo brand licenses
to Constellation for $2.9 billion. This came on top off a
previously announced agreement for AB InBev to sell Grupo
Modelo's 50 percent stake in Crown Imports LLC to Constellation,
for $1.85 billion.