Anheuser-Busch InBev (ABI.BR: Quote, Profile, Research, Stock Buzz), the world’s largest brewer, is seeking to slash its borrowing cost on an existing $8 billion syndicated loan, banking sources said on Thursday.
The company has asked its banks to cut pricing on the $8 billion revolving credit to around 45 basis points (bp) from around 75 bp, banking sources said.
ABInBev joins a long list of highly-rated blue-chip companies that are taking advantage of improved loan market conditions to cut the pricing on loans arranged only last year.
The changes are being done via a loan amendment which is being arranged by ABInBev, one of the sources said. AB InBev declined to comment.
AB InBev secured $17.2 billion of long-term financing in February 2010 which refinanced the remainder of the company’s $45 billion loan facilities that financed the acquisition of Anheuser-Busch in 2008.
The $17.2 billion of loans comprised a $5 billion, five-year term loan paying 117.5 bp over LIBOR, an $8 billion, five-year revolving credit facility paying 97.5 bp over LIBOR and $4.2 billion of bilateral facilities.
The bilateral facilities were cancelled at the end of March 2010.
Margins on the $8 billion revolving credit fell to the current 75 bp level from 95 bp after ABInBev’s rating was upgraded by the ratings agencies. The company is rated A- by Standard & Poor’s, Baa1 by Moody’s and A- by Fitch.
The $8 billion revolving credit facility also paid a commitment fee of 35 percent of the margin on undrawn available funds and a utilisation fee of up to 30 bp depending on the amount drawn.