Molson Coors arranges $2.5 billion of credit facility for StarBev buy

By Angela McDaniels

Tacoma, Wash., April 3 - Molson Coors Brewing Co. entered into agreements for $2.5 billion of credit facilities on Tuesday to help fund its acquisition of StarBev Holdings Sarl, according to an 8-K filing with the Securities and Exchange Commission.

The funding of the credit facilities will occur when the acquisition is completed, which is expected to occur in the second quarter.

The credit facilities include a $300 million term loan due April 3, 2016, a $300 million revolver due April 3, 2016 and a $1.9 billion bridge loan due April 2, 2013.

The interest rate for the term loan will be Libor plus 125 basis points to 250 bps. The commitment fee will be 15 bps to 37.5 bps.

Deutsche Bank AG, New York Branch is the administrative agent for the term loan.

The interest rate for the revolver is based on Libor or, for Canadian loans, CDOR plus 50 bps. In each case, the margin will be 125 bps to 250 bps, and the commitment fee will be 15 bps to 37.5 bps.

The revolver has a $100 million accordion feature.

Borrowings under the revolver can be made in U.S. dollars, Canadian dollars, British pounds sterling or euros.

Deutsche Bank AG, New York Branch is the administrative agent, and Deutsche Bank AG, Canada Branch, is the Canadian administrative agent.

The margin over Libor for the bridge loan will be 125 bps to 250 bps for days one through 89, 175 bps to 300 bps for days 90 through 179, 225 bps to 350 bps for days 180 through 269 and 275 bps to 400 bps from day 270 onward. The commitment fee is 15 bps to 37.5 bps.

The company must use the proceeds of certain debt offerings made by the company or its subsidiaries, the issuance of certain capital stock by the company and certain asset sales by the company or its subsidiaries to pay down the bridge loan.

Morgan Stanley Senior Funding, Inc. is the administrative agent for the bridge loan.

The credit facilities require the company to maintain a leverage ratio of no more than 4.0 to 1.0 during the period from April 3 to Sept. 30, 3.75 to 1.00 during the period from Oct 1, 2012 to March 31, 2013 and 3.50 to 1.0 thereafter.

The total purchase price for Starbev is €2.65 billion including the payoff of existing Starbev debt. Molson Coors will pay €500 million of the purchase price through the issuance of a convertible note to the seller, StarBev LP.

Molson Coors is a brewer based in Montreal and Denver. StarBev is a brewer based in Amsterdam and Prague.

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