Capital Markets

Bridges to Somewhere: Firms Focus on Loans

Anheuser-InBev moves to pay down $9.8b bridge loan, and other companies, too, pay special heed to their bridge financing.
Stephen TaubNovember 26, 2008

Bridge loans are getting extra attention in the challenging global credit market.

The Anheuser-Busch InBev brewery behemoth, for example, already has moved to pay down the $9.8-billion equity bridge it took out to complete the $52-billion acquisition. According to the Financial Times, the newly formed company has launched an $8.2-billion rights issue at nearly a 70 percent discount to its stock price.

The paper said that the deep discount was referred to by beverage industry analysts as “off the scale,” compared with previous issues in the sector. But in any case, the company is determined to pare its borrowings, which also included $45 billion in debt financing to complete the merger.

Meanwhile, Cap Cana S.A., a luxury second-home real-estate project in the Dominican Republic, said it had obtained an extension of its $100 million bridge loan. As a result, it said, the default for nonpayment of principal that occurred on Nov. 19 has been waived.

The company also announced that the final maturity of the bridge loan has been extended until Dec. 29. “This extension provides the company with additional time to define restructuring alternatives,” it said.

And in other bridge-loan news, MF Global Ltd., a broker of exchange-listed futures and options, said it had repaid the final portion of a $1.4-billion bridge facility that it entered into at the time of its initial public offering in July 2007. “The $100 million payment is ahead of schedule and marks the final step in the company’s refinancing plan,” MF Global said.