Fitch assigns BBB- to Bacardi notes

Fitch Ratings said it assigned a BBB- rating to Bacardi Ltd.’s $2.6 billion multi-tranche offering.

The outlook is negative.

Bacardi intends to use the net proceeds to fund the Patron Spirits International AG acquisition and the make-whole redemption of the 2019 notes, and the remainder for general corporate purposes.

The commitments under the $2.6 billion bridge facility will be reduced on a dollar-for-dollar basis with proceeds received from the offering. Bacardi will finance the remaining portion of the acquisition with a $1.2 billion term loan due 2021 ($700 million) and 2023 ($500 million).

Fitch said the BBB- rating reflects Bacardi's strong investment-grade business profile supported by leading premium and above brands, the material global scale of the largest privately held spirits company, product diversification and solid profitability that generates relatively stable cash flows.

However, these positives are balanced against challenges within Bacardi's key brands that have resulted in stagnant operating performance during the past several years, and the high financial leverage resulting from Bacardi's definitive agreement to purchase Patron.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.