Anheuser-Busch InBev (ABI.BR) said on Thursday that it had canceled $42.5 billion of a record $75 billion senior acquisition loan after raising a hugely successful bond which was used to repay part of the loan.
The Belgium-based brewer, which is taking over rival SABMiller (SAB.L) in a $100 billion-plus takeover, said it had raised about $47 billion in net proceeds from a $46 billion bond issuance announced on Jan. 13 and the $1.47 billion Formosa deal announced on Jan. 20.
The rousing response to AB InBev's $46 billion bond, which raised a $110 billion order book - the largest ever for a bond issue - and rapid loan repayment is good news for the company and the 21 banks, which committed up to $4 billion each to the jumbo acquisition loan.
"This is a big relief for banks, which can reuse the capital. It's a successful transaction - we made tons of fees on the bonds and the bridges have been paid down which is a great result for everyone in a difficult market," a senior loan banker said.
The loan was reduced by $42.5 billion to $32.5 billion after the bond issues in January, which led to the mandatory cancellation of a $15 billion bridge to cash and a $15 billion bridge to debt capital markets on January 25.
AB InBev also chose to cancel $12.5 billion of a $25 billion term facility A.
"The remaining $12.5 billion cancellation of the three-year term loan facility A was done voluntarily," AB InBev said on Thursday.
The remaining loan now consists of a $12.5 billion, three-year term facility A, a $10 billion, five-year term facility B and a $10 billion, one-year disposals bridge facility, AB InBev said.
"This (amount) is manageable on a relationship basis," the senior loan banker said.
AB InBev said that it intended to use net proceeds from the sale of both SABMiller's stakes in MillerCoors and Miller brands, and other future disposals to pay down and cancel the disposals bridge facility in due course.
While launching its offer for rival SABMiller last year, AB InBev agreed to sell SABMiller's stake in U.S. venture MillerCoors to help win regulatory approval.
While the MillerCoors stake sale is aimed at satisfying U.S. regulators, it remains to be seen whether the new company will have to divest SABMiller's 49 percent stake in CR Snow, the largest brewer in China, where AB InBev already has about 14 percent of the market.
(Additional reporting by Martine Geller and Alasdair Reilly; Editing by Christopher Mangham and Gopakumar Warrier)