Senior banks will sign up for Belgian brewer InBev's $45 billion loan to finance its acquisition of rival Anheuser-Busch next week , but bank capital constraints have created a shortfall that could affect the syndication of up to $200 billion of recent M&A loans.
InBev asked banks to commit $1.75 billion each in return for high fees of 100 basis points (b.p.) or $17.5 billion and rich interest margins of 175 b.p., stepping down to 100 b.p.
Some banks found $1.75 billion challenging and made smaller commitments that were difficult for the arranging banks, which need full top-level commitments to keep the sell down on track. the August bank holiday at the end of the month, sources said.
InBev's arranging banks - Bank of Tokyo-Mitsubishi UFJ, Barclays Capital, BNP Paribas, Deutsche Bank, Fortis, ING, JP Morgan, Mizuho, Royal Bank of Scotland and Santander - now have slightly more to raise in general syndication to reduce their own exposure.
The lead banks have underwritten $4.5 to $5 billion each , and want to hold $3.2 billion after syndication , sources said. Being left overexposed will entail expensive secondary market sales. InBev's loan will be launched to a general syndication after the August bank holiday at the end of the month, sources said. InBev is planning to cut its loan by $19 billion within a year . $7 billion is a one-year bridge loan to asset disposals and $12 billion is a one-year bridge loan to capital markets issues. InBev has also secured a $9.8 billion bridge loan to an equity issue .
BG Group's $14 billion loan also has a one-year maturity with a one-year extension option and plans to refinance quickly.
$68.01 (08/14/08)
