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Interest-bearing loans and borrowings

6 Months Ended

Jun. 30, 2020

19.

Interest-bearing loans and borrowings

This note provides information about the company’s interest-bearing loans and borrowings. For more information about the company’s exposure to interest rate and foreign exposure currency risk - refer to Note 22

Risks arising from financial instruments.


Non-current liabilities Million US dollar	30 June 2020		31 December 2019
Secured bank loans		48		71
Unsecured bank loans		55		50
Unsecured bond issues		104 162		95 674
Unsecured other loans		81		77
Lease liabilities		1 688		1 692

Non-current interest-bearing loans and borrowings		106 034		97 564


Current liabilities Million US dollar	30 June 2020		31 December 2019
Secured bank loans		995		790
Commercial papers		3 072		1 599
Unsecured bank loans		133		135
Unsecured bond issues		1 916		2 532
Unsecured other loans		16		20
Lease liabilities		352		333

Current interest-bearing loans and borrowings		6 484		5 410

The current and

non-current

interest-bearing loans and borrowings amount to 112.5 billion US dollar as at 30 June 2020, compared to 103.0 billion US dollar as at 31 December 2019.

In March 2020, the company drew the full 9.0 billion US dollar commitment under the 2010 Senior Facilities Agreement, in order to proactively safeguard its liquidity position by holding cash on its balance sheet through the period of significant financial market volatility and uncertainty as a result of the

COVID-19

virus pandemic. As at 30 June 2020, the revolving credit facilities have been repaid in full.

Commercial papers amount to 3.1 billion US dollar as at 30 June 2020 (31 December 2019: 1.6 billion US dollar) and include programs in US dollar and euro with a total authorized issuance up to 5.0 billion US dollar and 3.0 billion euro, respectively

On 2 April 2020 and 3 April 2020, Anheuser-Busch InBev NV/SA (ABISA) and Anheuser-Busch InBev Worldwide Inc. (ABIWW) respectively, completed the issuance of the following series of bonds

Issue date

Issuer
(abbreviated)

Maturity date

Currency

Aggregate

principal
amount

(in millions)

Interest
rate

2 April 2020

ABISA

2 December 2027

EUR

1 000

2.125

2 April 2020

ABISA

2 April 2032

EUR

1 750

2.875

2 April 2020

ABISA

2 April 2040

EUR

1 750

3.700

3 April 2020

ABIWW

1 June 2030

USD

1 750

3.500

3 April 2020

ABIWW

1 June 2040

USD

1 000

4.350

3 April 2020

ABIWW

1 June 2050

USD

2 250

4.500

3 April 2020

ABIWW

1 June 2060

USD

1 000

4.600

Net debt is defined as

non-current

and current interest-bearing loans and borrowings and bank overdrafts minus debt securities and cash and cash equivalents. Net debt is a financial performance indicator that is used by AB InBev’s management to highlight changes in the company’s overall liquidity position. The company believes that net debt is meaningful for investors because it is one of the primary measures that AB InBev’s management uses when evaluating its progress towards deleveraging toward its optimal net debt to normalized EBITDA ratio of around 2x.

AB InBev’s net debt decreased to 87.4 billion US dollar as at 30 June 2020, from 95.5 billion US dollar as at 31 December 2019. Aside from operating results that are net of capital expenditures, the net debt is impacted mainly by the payment of interests and taxes (3.4 billion US dollar increase of net debt), foreign exchange impact on net debt (0.1 billion US dollar decrease of net debt)

settlement of derivatives (0.5 billion US dollar increase of net debt), dividend payments to shareholders of AB InBev and Ambev (1.2 billion US dollar)

and the proceeds from the divestiture of the Australian business (10.8 billion US dollar decrease of net debt)

The following table provides a reconciliation of AB InBev’s net debt as at the dates indicated:


Million US dollar	30 June 2020			31 December 2019
Non-current interest-bearing loans and borrowings		106 034			97 564
Current interest-bearing loans and borrowings		6 484			5 410

Interest-bearing loans and borrowings		112 518			102 974

Bank overdrafts		153			68
Cash and cash equivalents		(25 018	)		(7 238	)
Interest bearing loans granted and other deposits (included within Trade and other receivables)		(142	)		(146	)
Debt securities (included within Investment securities)		(123	)		(117	)

Net debt		87 388			95 542

Reconciliation of liabilities arising from financing activitie

The table below details changes in the company’s liabilities arising from financing activities, including both cash and

non-cash

changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be classified in the company’s consolidated cash flow statement from financing activities


Million US dollar	Long-term debt, net of current portion			Short-term debt and current portion of long-term debt
Balance at 1 January 2020		97 564			5 410
Proceeds from borrowings		10 915			3 607
Payments on borrowings		—			(4 328	)
Capitalization / (payment) of lease liabilities		290			(184	)
Amortized cost (including interest on leases)		36			59
Unrealized foreign exchange effects		(680	)		(147	)
Current portion of long-term debt		(2 076	)		2 076
Other movements		(15	)		(9	)

Balance at 30 June 2020		106 034			6 484


Million US dollar	Long-term debt, net of current portion			Short-term debt and current portion of long-term debt
Balance at 1 January 2019		106 997			4 584
Proceeds from borrowings		18 087			3 924
Payments on borrowings		(18 716	)		(1 884	)
Capitalization / (payment) of lease liabilities		321			(235	)
Amortized cost (including interest on leases)		44			58
Unrealized foreign exchange effects		(363	)		35
Current portion of long-term debt		(4 565	)		4 565
Other movements		(133	)		(83	)

Balance at 30 June 2019		101 672			10 964