Molson Coors borrows $2.5 billion of three-year, five-year term loans

By Angela McDaniels

Tacoma, Wash., Oct. 11 – Molson Coors Brewing Co. borrowed a $1 billion three-year term loan and a $1.5 billion five-year term loan on Tuesday, according to an 8-K filing with the Securities and Exchange Commission.

The company received commitments for the term loans on Dec. 16, 2015, and the closing conditions were satisfied Tuesday.

The company used the proceeds and cash on hand to acquire SABMiller plc’s 58% stake in MillerCoors LLC, the U.S. joint venture formed in 2008 by SABMiller and Molson Coors, and the Miller brand portfolio globally for $12 billion.

The five-year term loan is subject to quarterly principal payments equal to 2.5% in years two and three, 3.75% in year four and 5% in year five.

The interest rate is Libor plus a margin that ranges from 112.5 basis points to 200 bps.

The term loan agreement requires the company to maintain a maximum leverage ratio of 5.75 to 1.00 on the last day of the first, second, third and fourth fiscal quarters after the closing of the transaction; 5.25 to 1.00 on the last day of the fifth, sixth, seventh and eighth fiscal quarters after the closing of the transaction; 4.75 to 1.00 on the last day of the ninth, 10th, 11th and 12th fiscal quarters after the closing of the transaction; 4.25 to 1.00 on the last day of the 13th, 14th, 15th and 16th fiscal quarters after the closing of the transaction and 3.75 to 1.00 on the last day of the each fiscal quarter after that.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, UBS Securities LLC and MUFG are the joint arrangers and bookrunners. Bank of America Merrill Lynch, UBS and MUFG are the syndication agents. Bank of Montreal, Rabobank Nederland, New York Branch, Royal Bank of Scotland, Bank of Nova Scotia and Wells Fargo Bank, NA are the documentation agents. Citibank, NA is the administrative agent.

The transaction was conditioned on Anheuser-Busch InBev SA/NV acquiring SABMiller.

Molson Coors is a Denver-based brewing company.

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