SABMiller plc (SABMiller), the world’s second largest brewer by volume, has successfully raised US$2 billion in a debut issue of London listed, investment grade, corporate bonds. Lovells acted as lead and co-ordinating counsel for the issues.
SABMiller has raised a total of US$2 billion in its debut issue in the corporate bond markets, with a three part issue of US$600 million 5 year notes and US$1.1 billion 10 year notes by Miller Brewing Company, and US$300 million 30 year notes by SABMiller plc.
The proceeds from the Miller issue have been used to refinance Miller’s existing short term bank debt, and the proceeds of the SABMiller plc issue will be used for general corporate purposes. SABMiller has been assigned first time long term corporate credit ratings of BBB+/Baa1 (Stable/Stable) by Standard & Poors and Moody’s.
SABMiller is the product of the UK/US merger of South African Breweries and Miller Brewing Company in 2002, and as a result has complex tax and funding requirements, which necessitated significant preparatory work to ensure that the final transaction structure had the commercially appropriate profile for credit rating and investor purposes. The transaction successfully priced and closed against the back-drop of some of the most volatile bond markets seen in recent years.
The Lovells team was led by corporate partner John Davidson and equity capital markets partner Richard Brown, with senior associate Daniel Bingham. Advice on UK and US tax structuring and related matters was provided by Lovells’ tax partners Lyndsey Bainton in London and Joe Gruber in New York, and on Dutch legal issues by partners Ken Breken and Gerrit-Jan Bolderman in Lovells’ Amsterdam office.