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Fitch downgrades Anadolu Efes
Fitch Ratings said it downgraded Turkey-based Anadolu Efes Biracilik ve Malt Sanayii AS's local-currency senior unsecured and issuer default ratings to BB+ from BBB- and national rating to AA(tur) from AA+(tur) following Anadolu Efes' decision to fully guarantee Efes Breweries International's new $300 million syndicated loan. The outlook is stable.
Fitch said Anadolu Efes and Efes Breweries closed a $500 million three-year syndicated loan, $200 million of which will be used by Anadolu Efes and $300 million by Efes Breweries under guarantee from Anadolu Efes on a senior unsecured basis. The proceeds will be used to refinance the $500 million bridge loan facility, which was used by Efes Breweries to fund the acquisition of the Russian brewer Krasny Vostok, to buy out the minority interest of Efes Breweries' Russian subsidiaries and to fund other investment needs.
Until now, the agency had analyzed Anadolu Efes' capacity to service its unsecured debt in Turkey without taking into account Efes Breweries' contribution. This is because the ability of some of the latter's subsidiaries to upstream dividends has been restricted by covenants in some of the outstanding debt, and as Efes Breweries is in an investment phase, little free cash flow has been available for distribution to Anadolu Efes. However, with the issuance of the syndicated loan guaranteed by Anadolu Efes, Fitch said it is now appropriate to consider the consolidated figures, given that about half of the attributable debt and one third of the group's EBITDA (beer business only) will be at the Efes Breweries level.
On that basis, Fitch estimated that Anadolu Efes' gross leverage will be at about 1.5x debt to EBITDA versus about 0.7x for Anadolu Efes' Turkish operations in 2005.
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