Moody's Assigns 'A2' Rating to Recently Offered Anheuser-Busch InBev SA (BUD) Bonds
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Moody's Investors Service today assigned an A2 rating to the notes that were launched by Anheuser-Busch InBev SA (NYSE: BUD). The outlook remains positive. All other ratings remain unchanged. Proceeds will be used for general corporate purposes.
*** Note: The latest BUD press release on notes pricing can be downloaded here (pdf format).
RATINGS RATIONALE
Anheuser-Busch InBev SA/NV's (ABI) A2/(P)Prime-1 ratings reflect the company's position as the world's largest brewer, its wide portfolio of brands at various price points, and leading positions in some of the largest and most profitable beer markets in the world. It also reflects ABI's seasoned management with a solid track record of integrating acquisitions, as well as improving efficiencies and Moody's expectation that the company will reduce leverage over the medium term. The ratings are further supported by the company's strong margins, excellent liquidity and large, stable cash flow. At the same time, the ratings factor in the company's exposure to somewhat volatile economies, including parts of Latin America and Asia, in addition to declining beer consumption in developed markets such as North America and Europe.
The positive outlook reflects Moody's expectation that management will continue to conservatively manage ABI's capital structure and liquidity. Moody's expects debt to EBITDA (per Moody's definition) to approach 2.5 times over the next twelve to eighteen months as ABI reaches its net debt to EBITDA target of 2.0 times during this period. Moody's also expects that ABI will maintain its strong operating margins while recently acquired businesses are successfully integrated.
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