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InBev's $45 bln loan still open ahead of Bud meeting
2008-11-11
LONDON - InBev's $45 billion loan backing its acquisition of Anheuser-Busch remains open for commitments ahead of Wednesday's Anheuser shareholder vote, banking sources said on Tuesday.The loan has been in wider syndication via arrangers Bank of Tokyo-Mitsubishi UFJ, Barclays Capital, BNP Paribas, Deutsche Bank, Fortis, ING, JP Morgan, Mizuho, Royal Bank of Scotland and Santander since the beginning of September, Reuters reported. Prior to that, nine banks joined the loan in a senior syndication out of twenty invited: Bank of America, BayernLB, Dresdner Bank, Intesa Sanpaolo, KBC Bank, Rabobank, Scotia Capital, Societe Generale and Toronto-Dominion Bank. Although no concrete date had been set, the loan is expected to fund by the end of November, the sources said. Drawdown is dependent on the completion of the acquisition and no drawdown notice has been issued yet, they added. "When the acquisition is complete and the shareholders paid, the money will be drawn. Funding is likely to be before the end of November but may slip," a banker close to the deal said. Bankers say that lenders are keen for the loan to be drawn as soon as possible. Banks that have prefunded the loan have funding costs to bear and are keen to receive interest payments. Funding may precede the close of syndication, which may not be until next year, sources said, as banks' drive to offload assets before the end of the year could drag the loan's secondary price down. As with the other large M&A financings in the market, the transaction has found it hard to garner commitments in the market, a task made more difficult by the approaching year-end reporting season. A banker said, "This year hasn't been great as far as number of deals is concerned, but there have been some big deals which have been very lucrative. So people are now turning around and saying we've done well this year despite the evident downturn and now we'll save things for next year." Banking sources said that the arrangers targeted Australian and Japanese banks -- banks which are not coming up to year-end reporting and which are still perceived to be open for business. Having appointed the arranging banks in June, the lengthy syndication process has also impacted potential lenders' view of the loan and underlying acquisition. "The transaction no longer makes sense to some. Nothing is wrong with the companies involved, it's just that the market has moved on," said one senior banker. Anheuser-Busch said in an SEC filing on Monday that the acquisition remains fully on track to close before year-end.
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