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Constellation Plans $1.55 Billion Debt Sale to Fund Crown Deal

Constellation Brands Inc. (STZ) is planning to sell $1.55 billion of debt in two parts to help fund its path to becoming the sole U.S. importer of Corona beer.

The Victor, New York-based company intends to issue senior notes due 2021 and 2023, the firm said in a regulatory filing today. Proceeds will be used to help finance Constellation’s purchase of the remaining 50 percent stake in Crown Imports LLC, a joint venture with Grupo Modelo SAB that imports brands including Corona Extra, Negra Modelo and Pacifico, as well as Modelo’s Piedras Negras brewery, the filing said.

Constellation last sold bonds in August, issuing $650 million of 4.625 percent securities due March 2023 to yield 309 basis points more than similar-maturity Treasuries, Bloomberg data show. The bonds were called at par on Feb. 20, the day Anheuser-Busch InBev NV (ABI) and the U.S. said they were in talks to resolve the Justice Department’s lawsuit to block AB InBev’s planned $20.1 billion purchase of Grupo Modelo.

The resolution allows Constellation to buy the import rights to Grupo Modelo brands that it doesn’t already own and the brewery in Mexico for $4.75 billion.

Bank of America Corp., JPMorgan Chase & Co., Rabobank International, Barclays Plc and Wells Fargo & Co. are managing the sale, the filing said. Pricing of the deal may come as soon as today, according to a person familiar with the offering who asked not to be identified because terms aren’t set.

To contact the reporter on this story: Victoria Stilwell in New York at +1-212-617-1909 or vstilwell1@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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