Anheuser Busch Companies (BUD)

[FUNMAN]

BUD's $10 Billion Deal Spurs Hope for High-Grade Debt


The good news here is this is funding to pay off the first round of short term debt related to the Miller acquisition.


Click here for those details

https://www.sec.gov/Archives/edgar/data/1668717/000119312518090001/d550898dex991.htm



By Lisa Loray
March 21, 2018, 12:16 PM EDT



Corporate bond investors are crossing their fingers in hopes the second largest deal of the year will help lift the high-grade credit market after the biggest sale earlier this month failed to stem widening spreads.



So far it looks good. Anheuser-Busch InBev SA/NV’s bonds are rallying - with spreads three to seven basis points tighter as of around 10 a.m. -- after it sold $10 billion of high-grade debt on Tuesday. But the big question is whether the strong demand for the beer maker’s issuance will help bolster a sagging investment-grade market, which CVS Health Corp.’s $40 billion offer on March 6 failed to do.



Tale of Two Jumbos
CVS and Anheuser-Busch weigh heavy on the U.S. credit market


Click here to view article online and all charts:

https://www.bloomberg.com/news/articles/2018-03-21/anheuser-busch-s-10-billion-deal-spurs-hope-for-high-grade-debt


The similarities between the two sales are striking. Both priced on a Tuesday, saw healthy demand and met markets quieted by snowstorms. Anheuser-Busch also has to contend with the Federal Reserve meeting.


In CVS’s case, its bonds rallied while the rest of the market faltered. The Bloomberg Barclays IG OAS index rose five basis points in the week following the trade, adding to the five basis point increase over a similar period leading up to it.


Bank of America analysts led by Hans Mikkelsen think the opposite could happen this time around. They expect spreads in the credit market will narrow partly due to an end of the heavy supply, according to a note Tuesday.