SABMiller latest firm to roll over its debt
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Consumer Industries Editor
CAPE TOWN SA's giant offshorelisted entities are taking advantage of current favourable corporate bond rates to launch new debt offerings or roll over existing debt.
SABMiller, the London-listed brewer that owns SA Breweries and Miller Brewing in the US, has appointed six banks to arrange a $750m syndicated credit facility, investment banking company Dresdner Kleinwort Wasserstein said this week.
This represents the roll-over of SABMiller's existing $750m loan facility, which was put in place on April 4 2000 and renewed for a further year. The new five-year facility will be used for general corporate purposes.
A local analyst said the saving to SABMiller from a lower rate on a portion of its debt would not make a significant difference to the bottom line.
Last year, SABMiller's interest bill was only $163m on profit before interest and tax of $933m.
Dresdner loan syndicate divisional MD Stein Melsbo said yesterday that the current $750m facility carries a rate of 0,55% over the London Interbank Offering Rate (Libor), whereas the new facility was expected to be at 0,375% above Libor, which is significantly cheaper.
SABMiller can secure this rate because it has a BBB+ rating from Standard & Poor's and a similar rating of Baa1 from Moody's for its long-term senior unsecured debt. It also has an existing lending group of about 30 European banks, whereas corporates would typically have a lending group of only 15 to 20 banks.
The six arranging banks Dresdner, ABN Amro, Bank of America, Credit Agricole Indosuez, Royal Bank of Scotland and Société Générale will take up part of the facility.
In February, Anglogold raised $1bn of five-year convertible bonds to help pay for its purchase of mining and exploration group Ashanti Goldfields.
The coupon on the bonds was 2,125%-2,625%, which Anglogold finance director Jonathan Best said was not expensive, as the corporate bond market was currently offering very good rates for borrowers.
Apr 02 2004 07:39:46:000AM Charlotte Mathews Business Day 1st Edition
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