Molson Coors Beverage Company Announces Pricing of its Public Offering of Euro-Denominated Senior Notes

Rhea-AI Summary

Molson Coors Beverage Company (NYSE: TAP) announced the pricing of its public offering of €800 million of 3.800% Senior Notes due 2032. The offering is expected to close on May 29, 2024, subject to customary conditions. Net proceeds are estimated at €793.5 million after underwriting discounts and expenses. The funds will be used for general corporate purposes, including repaying €800 million in notes maturing in July 2024. Joint book-running managers include Citigroup, BofA Securities, Goldman Sachs, among others. The offering is made under an effective SEC shelf registration statement.

Positive

• €800 million raised from public offering of senior notes.
• Expected net proceeds of €793.5 million.
• Funds to be used for general corporate purposes including repayment of maturing debt.
• Offering managed by reputable financial institutions such as Citigroup and Goldman Sachs.
• 3.800% interest rate on senior notes due 2032.

Negative

• Dependence on issuing debt to manage corporate finances.
• Upcoming repayment of €800 million in maturing notes, indicating high debt levels.
• Potential market risk if offering does not close as expected.

Insights

Financial Analyst

Molson Coors' recent announcement of its €800 million public offering is a notable financial maneuver. The company plans to use the proceeds to repay existing debt maturing in July 2024, essentially rolling over its debt. This practice is common in corporate finance to manage cash flows and avoid liquidity issues.

Interest Rate and Market Timing: The new notes carry a 3.800% interest rate, which is relatively favorable given the current interest rate environment. By locking in this rate, Molson Coors is likely seeking to manage its cost of borrowing effectively.

Debt Management: The repayment of the 2016-issued notes with the new offering is a strategic move to maintain liquidity and avoid a sudden cash outflow that could impact operations. Investors generally view this kind of proactive debt management positively, as it demonstrates financial prudence.

Implications for Investors: From an investor's perspective, the issuance will not immediately affect the equity value. However, it signals stable financial planning. The ability to secure financing at a favorable rate also reflects well on the company’s creditworthiness and market position.

Conclusion: This offering is a straightforward debt management strategy to ensure continuity and stability in Molson Coors' financial operations.

Market Research Analyst

From a market perspective, Molson Coors' issuance of €800 million in senior notes is an interesting move. This action reflects the company's response to its debt maturity schedule and its broader strategic financial planning.

Market Confidence: Conducting a public offering of this magnitude indicates confidence in market conditions and investor appetite for corporate bonds. The joint effort by major financial institutions like Citigroup, BofA Securities and Goldman Sachs also underscores market confidence in Molson Coors' financial health and stability.

Regional Impact: The euro-denominated issuance suggests a strategic focus on the European market, potentially benefiting from more favorable interest rates compared to the U.S. This could also be an attempt to hedge against currency risks associated with their European operations.

Strategic Use of Funds: The alignment of the new issuance with the repayment of older debt ensures that there is no disruption in the company's financial operations, which is important for continued market stability and investor confidence.

Conclusion: This issuance is a well-strategized move that aligns with Molson Coors' broader financial and operational goals. It reflects a mature approach to managing market relations and maintaining robust financial health.

GOLDEN, Colo. & MONTRÉAL--(BUSINESS WIRE)-- Molson Coors Beverage Company (“Molson Coors” or the “Company”) (NYSE: TAP, TAP.A, TAP 24; TSX: TPX.A, TPX.B) announced today that it has priced its previously announced public offering (the “Offering”) of €800,000,000 aggregate principal amount of its 3.800% Senior Notes due 2032 (the “Notes”). The Offering is expected to close on or about May 29, 2024, subject to customary closing conditions.

After deducting underwriting discounts and estimated Offering expenses, Molson Coors expects to receive net proceeds from the Offering of approximately €793.5 million. Molson Coors intends to use the net proceeds of this Offering for general corporate purposes including the repayment of the €800.0 million notes issued on July 7, 2016 upon maturity in July 2024.

Citigroup Global Markets Limited, BofA Securities, Goldman Sachs & Co. LLC, Bank of Montreal, London Branch, J.P. Morgan Securities plc, RBC Europe Limited and Scotiabank (Ireland) Designated Activity Company are acting as joint book-running managers for the Offering.

The Offering is being made pursuant to an effective shelf registration statement (including a prospectus) (File No. 333-277183) filed with the Securities and Exchange Commission (“SEC”), which became effective upon filing. A preliminary prospectus supplement related to the Offering was filed with the SEC on May 22, 2024 and is available on the SEC’s website at www.sec.gov. A final prospectus supplement related to the Offering will be filed with the SEC. A copy of the prospectus and related preliminary prospectus supplement for the offering may be obtained by contacting: Citigroup Global Markets Limited by mail at Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, United Kingdom or by telephone at 1-800-831-9146; BofA Securities by mail at 2 King Edward Street, London, EC1A 1HQ, United Kingdom or by telephone at 1-800-294-1322; Goldman Sachs & Co. LLC by mail at Prospectus Department, 200 West Street, New York, NY 10282, by telephone at 1-866-471-2526, by facsimile at 212-902-9316 or by email at Prospectus-ny@ny.email.gs.com.

This press release is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, any of the Notes or any other security, nor shall there be any sale of the Notes or any other security in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or other jurisdiction.

Overview of Molson Coors

For more than two centuries, Molson Coors Beverage Company has been brewing beverages that unite people to celebrate all life’s moments. From our core power brands Coors Light, Miller Lite, Coors Banquet, Molson Canadian, Carling and Ožujsko to our above premium brands including Madri, Staropramen, Blue Moon Belgian White and Leinenkugel’s Summer Shandy, to our economy and value brands like Miller High Life and Keystone, we produce many beloved and iconic beer brands. While our Company's history is rooted in beer, we offer a modern portfolio that expands beyond the beer aisle as well, including flavored beverages like Vizzy Hard Seltzer, spirits like Five Trail whiskey as well as non-alcoholic beverages.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the U.S. federal securities laws. Such statements include, without limitation, the Molson Coors’ plans and intentions regarding the Offering and the use of proceeds from the Offering. Such forward-looking statements are subject to certain risks, uncertainties and assumptions, including, without limitation, prevailing market conditions and other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. More information about potential risk factors that could affect Molson Coors and its results is included in Molson Coors’s filings with the SEC, including our most recent Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q, which are available at www.sec.gov. All forward-looking statements in this press release are expressly qualified by such cautionary statements and by reference to the underlying assumptions. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Molson Coors does not undertake to update forward-looking statements, whether as a result of new information, future events or otherwise.

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News Media

Rachel Dickens

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Investor Relations

Greg Tierney

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Traci Mangini

(415) 308-0151

Source: Molson Coors

FAQ

What is the amount raised by Molson Coors in its latest offering?

Molson Coors raised €800 million in its latest public offering of senior notes.

What is the interest rate of the newly issued Molson Coors senior notes?

The interest rate of the newly issued senior notes is 3.800%.

When is the expected closing date for Molson Coors' senior notes offering?

The offering is expected to close on May 29, 2024.

What will Molson Coors use the net proceeds of the offering for?

The net proceeds will be used for general corporate purposes, including repaying €800 million in notes maturing in July 2024.

How much does Molson Coors expect to net from the offering after expenses?

Molson Coors expects to net approximately €793.5 million after underwriting discounts and offering expenses.