InBev, Economy Meeting; Anyone Want to Comment?

From emmi.com ---will this open some eyes in the investing world named Busch or Anheuser?


Here's the link for the following story, in case you'd like to see it on their webpage:

http://www.emii.com/Articles/1995980/Capital-Markets/Capital-Markets-Articles/InBevs-Loan-Signals-MA-Woes.aspx

InBev's Loan Signals M&A Woes
08-15-2008

People & Companies in the News

InBev
Anheuser-Busch
Senior banks will sign up for Belgian brewer InBev's $45 billion loan to finance its acquisition of rival Anheuser-Busch next week. But bank capital constraints have created a shortfall that could affect the syndication of up to $200 billion of recent M&A loans, reports Reuters.


InBev's arranging banks were left slightly over their target sell down level after the first round of syndication as banks continue to suffer from high funding costs and thin dollar liquidity, loan market sources said.


The outcome of the InBev loan, which carried one of the highest interest margins even seen on an investment-grade loan, will push loan pricing higher and is a sign of potential trouble ahead for the syndication of jumbo M&A loans, particularly toward the end of the year.


Now, I don't know about you, but at this moment I am starting to think that a parade of people on Pestalozzi may not like reading this article. This isn't a good signal, unless the Busch boardroom is filled with people who think they're going to be in a position to get the company BACK from InBev if something goes wrong. I'll bet against it, because wouldn't you make sure that if you're purchasing a company that the legal lettering in the contract would keep you and your company (Carlos Brito's InBev) from losing your acquisition if the financing simply sucks?

Well, okay --- I'm not financially responsible myself, so what would I know about high interest rates and multi-billion-dollar deals? Not much is the rhetorical answer. But, I can read a news article and gain a little bit of knowledge from the stated information. This article says to me that the banking community in the world looks at this deal and the past performance of InBev and thinks they're overextending themselves to make this purchase work. SOMEONE TELL ME IF I AM WRONG!!! Seriously --- if you're a banking professional and trying to not take gigantic risks in a down economy --- would you make the bank loans necessary for this multi-billion-dollar buyout???

I view it this way: InBevA-B could be in trouble before the acquisition is complete. But not necessarily so if we all continue to buy beer and other company products.

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It is a down economy. It's an undefined, yet certain, recession. It could be a depression --- there are signs that the jobless rate is UNDER-REPORTED. If you go with the bet that many Americans and others outside the U.S. are actually working less than full-time yet cannot be counted in the statistics because of either many hours worked at a low-wage job or earn too much even though they work only a few hours a week at a higher-wage job, then you're probably living in reality. Many I know are in the one of these two groupings of adults. Teenagers who are unemployed may be finding it more difficult to work part-time because of the many adults who are forced into working more than one job a day and have taken jobs that would have normally been given to teens. No matter which way it has effected these people (who am I kidding? I'm one of them, too) the lack of full-time and good-paying jobs is obvious, and, I believe it's patently unfair for the statisticians to allow such under-reporting to continue even if the statistics are supposed to be "official" numbers which can be released by the government agencies. The government put the restrictions upon the statisticians --- that is the problem. And it doesn't matter where the restriction comes from --- whether Congressional legislation or agency edict --- it is STUPID! Maybe I could whitewash the truth the way they do, but why?

Any comments?

Back to the Fold

After an absence of more than three months, I have returned to the blogosphere.

Coming soon, we'll deal with the topics of the economy --- you don't think others will mind me doing that, do you?

I was working a lot recently. After long consideration, it was time to work just a bit less. Sure, the economy sucks. But so does working so much that you don't allow your body to heal properly.

I don't know about you, but it's nice to take a breather once a day. You know, have an actual "break" in the action for 20 or 30 minutes. I used to schedule that when I worked all week and weekend and had 12 to 13 hour days on a regular basis. More recently, I was working every day, but was limiting my daily hours. Now, after considering all my options, I am FURTHER limiting my daily hours worked. I need more breaks, and working 10 hour days - and the occasional 18 hour day - has to be SEVERELY limited to twice a week in order that I stay healthy. And now that I've done those lengthy days back to back a few times, I will also limit those to every OTHER day so I can rest between the aggrivatingly long ones.

Greetings to my friends in the Carondelet neighborhood. See you soon in the CWP!