OK, I Get it, this is Going to be a Mess: Standard & Poor’s Lowers Boom at Worst Possible Time
by Wolf Richter
WolfStreet.com
January 13, 2016
Worst drop in the “net outlook bias” since the Financial Crisis.
The world’s biggest beer conglomerate Anheuser-Busch InBev’s acquisition of the world’s second biggest beer conglomerate SABMiller, both of which are getting their clocks cleaned in the US by over 4,000 mostly upstart craft brewers, isn’t going to improve the flavor of their brewskis. But the $106-billion deal is going to flood the market with one of the largest bond offerings in history.
It’s the first big bond deal this year. To fund and complete last year’s M&A frenzy, many more bond deals are looming on the horizon, at the worst possible time since 2009, according to Standard & Poor’s.
AB InBev has now started marketing this bond monster. In October, it was rumored that it could eventually issue $55 billion of bonds, plus up to $15 billion of loans. The US portion of the deal now being marketed is likely to be about $25 billion, Bloomberg reported. That alone would make it the second largest offering to finance an acquisition, behind Verizon’s $49 billion offering to fund its Vodafone deal.
About $630 billion in mega acquisitions from the record M&A frenzy in 2015 are scheduled to close this year and are still waiting for funding, according to Bank of America strategists cited by Bloomberg. They include Dell, Anthem, and Newell Rubbermaid. On top of the acquisitions this year.
The Rest…HERE
