SABMiller hires 10 banks for Foster’s loan
2011-08-26 11:20:33
SABMiller Plc (SAB), the world’s second- largest brewer by volume, hired 10 banks to raise $12.5 billion of loans for its hostile bid to take over Foster’s Group Ltd. (FGL), according to a person with direct knowledge of the deal.
The lenders, led by advisers JPMorgan Chase & Co., Royal Bank of Scotland Group Plc and Morgan Stanley, will underwrite $1.25 billion each, said the person, who declined to be identified because the terms are private.
The deal is the biggest acquisition financing by a European company since drugmaker Sanofi-Aventis obtained a $15 billion in October for its offer to buy Genzyme Corp., according to data compiled by Bloomberg. The loan is being arranged at a time when the cost for European banks to borrow in dollars is at the highest level in a year in a sign of increased stress in credit markets.
The maker of Miller Lite and Grolsch beer agreed to pay interest of about 90 basis points more than the London interbank offered rate for a five-year portion of the financing, two people familiar with the situation said last week. The debt also consists of three-year term loans and a revolving credit line, the people said. A basis point is 0.01 percentage point.
The financing includes $8 billion of 18-month bridge loans to be refinanced with bonds, the person said.
Jonathon Brill, a spokesman for London-based SABMiller, declined to comment.
The group also includes Banco Bilbao Vizcaya Argentaria SA, Banco Santander SA, Barclays Capital, Bank of America Merrill Lynch, Citigroup Inc., Bank of Tokyo-Mitsubishi UFJ and Mizuho Financial Group Inc., according to a Reuters report.
Funding Costs
The rate that London-based banks say they can borrow at for three months in dollars rose to highest in a year after climbing for a 23rd day.
Libor increased to 0.3911 percent from 0.31428 percent yesterday, according to the British Bankers Association. The dollar Libor-OIS spread, a gauge of banks’ reluctance to lend, increased to 23.7 basis points as of 2:08 p.m. in New York, from 22.93 basis points yesterday. That’s the highest level since Aug. 9, 2010, according to Bloomberg data.
Standard & Poor’s and Fitch Ratings rank SABMiller’s debt at BBB+. Moody’s Investors Service rates it Baa1. The company has said it aims to keep its investment-grade credit rating while financing the acquisition with debt.
Moelis & Co. are also advising SABMiller on the deal.