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Anheuser-Busch InBev continues deleveraging
Anheuser-Busch InBev has made an early payment of $3.7bn to Facility ‘C’ of its senior acquisition facilities from proceeds of previously announced disposals.
The company paid $3.7bn of the remaining $8.9bn outstanding under Facility ‘C’ maturing in November 2011, thereby reducing the original $13bn of the Facility ‘C’ to $5.2bn.
Further to the various repayments and refinancings, AB InBev now has $17.2bn outstanding under its original $54.8bn acquisition facilities, used in connection with the acquisition of Anheuser-Busch Companies Inc, with the earliest maturity being November 2011 and most outstanding amounts due only in November 2013.
As a direct consequence of this prepayment, finance costs in 4Q09 will include incremental accretion expenses of $39m and a one-time loss of approximately $221m, as interest rate swaps hedging the repaid parts of Facility ‘C’ are no longer effective.
While the accretion expense is a non-cash item, the cash equivalent of the negative mark-to-market adjustment will be spread over 2010 and 2011. This loss is in addition to the fourth-quarter incremental accretion expenses of $86m and interest hedging loss of $240m, as a direct consequence of prior prepayments of senior debt facilities.
As these losses are recognised in 4Q09, they will result in lower interest expense in 2010. Additionally, the company expects to incur incremental accretion expenses of $21m and a one-time, non-cash loss of $29m related to the repayment of debt outstanding under its €2.5bn syndicated facility.
Source: AB InBev
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