AB InBev Sells Bonds as Yields Fall to Three-Week Low in Europe
Anheuser-Busch InBev NV (ABI), the world’s biggest brewer, sold $1.8 billion of bonds denominated in euros and pounds after corporate borrowing costs fell to the lowest in three weeks in Europe.
The average yield demanded to hold investment-grade securities dropped five basis points to 2.02 percent, the lowest since Aug. 27, Bloomberg index data show. The cost of insuring the debt against losses held at a 16-week low, with the Markit iTraxx Europe index of credit-default swaps falling 0.6 basis point to 93 basis points.
Borrowers are concerned the strengthening global economy will trigger higher benchmark rates. The U.K. sold a stake in Lloyds Banking Group Plc (LLOY) in the first step toward returning Britain’s largest mortgage lender to private ownership, while Federal Reserve policy makers begin a two-day meeting today where they will probably reduce monthly bond purchases by $10 billion to $75 billion, according to economists surveyed by Bloomberg News.
“There’s demand from corporates in the expectation that this could be the last of the easy days of funding at cheap rates,” said Bill Blain, a strategist at Mint Partners Ltd. in London. “Companies are also looking at global economies growing stronger as the time to invest and expand their businesses.”
AB InBev priced 750 million euros ($1 billion) of seven-year notes to yield 48 basis points more than the mid-swap rate, according to data compiled by Bloomberg.The brewer also sold 500 million pounds ($795 million) of 12-year notes yielding 105 basis points more than U.K. government debt. It’s the company’s first sale in the currency since June 2009, the data show.
Karen Couck, a spokeswoman for AB InBev in Leuven, Belgium confirmed the company was selling bonds without providing any further information.
Also in credit markets today, Finnish telecommunications company Elisa Corporation (ELI1V) sold 300 million euros of securities maturing in January 2021, Bloomberg data show. The notes yield 95 basis points more than swaps.
UniCredit SpA (UCG), Italy’s biggest bank, raised 1.25 billion euros from bonds due January 2019 that yield 225 basis points more than swaps.
Korea Gas Corp. (036460), the world’s largest liquefied natural gas buyer, has hired banks to arrange investor meetings in Europe starting Sept. 23 for a potential euro-denominated bond sale.
To contact the reporter on this story: Katie Linsell in London at firstname.lastname@example.org