Molson Coors Brewing Co. sold 800 million-euros ($889 million) of bonds in Europe’s first corporate-debt deal since the U.K.’s decision to leave the European Union sent world markets spinning.
Proceeds from the U.S. brewer’s sale, along with those from a U.S. dollar bond deal and Canadian dollar private placement on Tuesday, will help fund its acquisition of SABMiller Plc’s stake in MillerCoors, the company said in a statement. The euro notes will mature in July 2024, according to data compiled by Bloomberg.
The deal is the first since June 20 and breaks a silence in Europe’s corporate-bond market. Britain’s decision to exit the EU convulsed markets worldwide, prompting issuers to bide their time as corporate credit risk surged and investors sought the safety of government debt.
“I would expect it to do reasonably well, even though the rest of the world and the market seems uncertain,” said Regina Borromeo, a London-based money manager at Brandywine Global Investment Management, which oversees $70 billion of assets. Molson Coors is “a well-known brand and people understand the business model, which has historically been resilient,” she said.
The euro bonds, the company’s first since 2012, priced to yield 110 basis points above benchmark rates after an initial 145 basis points was discussed, according a person familiar with the deal, who asked not to be identified because they’re not authorized to speak publicly.
When Anheuser-Busch InBev NV sold euro bonds in March following a January dollar sale for its purchase of SABMiller Plc, the deal’s nine-year bonds yielded 100 basis points more than benchmarks and are now are quoted with a premium of about 65 basis points, according to Bloomberg data. Denver-based Molson Coors is rated BBB- by S&P Global Ratings and Baa3 by Moody’s Investors Service, three levels below AB InBev and the ratings companies’ lowest investment grade.
Molson Coors said the sales would total the equivalent of $6.8 billion after it sold $5.3 billion of bonds with maturities ranging from three years to 30 years and issued 1 billion Canadian dollars ($770 million) of notes on Tuesday.