24.

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 29 Risks arising from financial instruments.


NON-CURRENT LIABILITIES Million US dollar	31 December 2018		31 December 2017
Secured bank loans		109		230
Unsecured bank loans		86		153
Unsecured bond issues		105 170		108 327
Unsecured other loans		57		53
Finance lease liabilities		162		186

Non-current interest-bearing loans and borrowings		105 584		108 949


CURRENT LIABILITIES Million US dollar	31 December 2018		31 December 2017
Secured bank loans		370		272
Commercial papers		1 142		1 870
Unsecured bank loans		22		739
Unsecured bond issues		2 626		4 510
Unsecured other loans		14		15
Finance lease liabilities		42		27

Current interest-bearing loans and borrowings		4 216		7 433

The current and non-current interest-bearing loans and borrowings amount to 109.8 billion US dollar as of 31 December 2018, compared to 116.4 billion US dollar as of 31 December 2017.

Commercial papers amount to 1.1 billion US dollar as of 31 December 2018 and include programs in US dollar and euro with a total authorized issuance up to 3.0 billion US dollar and 1.0 billion euro, respectively.

During 2018, AB InBev completed the issuance of the following series of bonds:

Issue date

Aggregate
principal amount
(in millions)

Currency

Interest rate

Maturity date

23 January 2018

1 500

Euro

3M EURIBOR + 30 bps

15 April 2024

23 January 2018

2 000

Euro

1.150%

22 January 2027

23 January 2018

750

Euro

2.000%

23 January 2035

4 April 2018

1 500

USD

3.500%

12 January 2024

4 April 2018

2 500

USD

4.000%

13 April 2028

4 April 2018

1 500

USD

4.375%

15 April 2038

4 April 2018

2 500

USD

4.600%

15 April 2048

4 April 2018

1 500

USD

4.750%

15 April 2058

4 April 2018

500

USD

3M LIBOR + 74 bps

12 January 2024

On 19 March, the company redeemed the entire outstanding principal amount of the Anheuser-Busch InBev Worldwide notes with a principal amount of 2.5 billion US dollar due in 2019 bearing interest at 7.75%.

On 23 April, the company redeemed the entire outstanding principal amount of certain notes due in 2019 and 2020. The total principal amount of the notes that were retired is approximately 7.8 billion US dollar.

On 6 June, the company redeemed the entire outstanding principal amount of the Anheuser-Busch InBev Worldwide notes due 2020. The total principal amount of notes that were retired is 1.0 billion US dollar.

On 13 December, the company redeemed the entire outstanding principal amount of the Anheuser-Busch InBev Finance notes due 2021. The total principal amount of notes that were retired is 2.5 billion US dollar.

The redemption of these notes was financed with cash.

On 26 November, the company announced the final results of a U.S. private exchange offer for a series of six notes issued by Anheuser-Busch InBev Finance for notes co-issued by Anheuser-Busch Companies, LLC (“ABC”) and Anheuser-Busch InBev Worldwide Inc. The total principal amount of notes exchanged listed below is 23.5 billion US dollar.


Issuer	Title of series of notes issued exchanged		Original principal amount outstanding (in million US dollar)		Principal amount outstanding exchanged (in million US dollar)		Principal amount not exchanged (in million US dollar)
Anheuser-Busch InBev Finance		4.9% Notes due 2046		11 000		9 543		1 457
Anheuser-Busch InBev Finance		4.7% Notes due 2036		6 000		5 385		615
Anheuser-Busch InBev Finance		3.65% Notes due 2026		11 000		8 555		2 445

AB InBev is in compliance with all its debt covenants as of 31 December 2018. The 2010 senior facilities do not include restrictive financial covenants.


TERMS AND DEBT REPAYMENT SCHEDULE AT 31 DECEMBER 2018 Million US dollar	Total		1 year or less		1-2 years		2-3 years		3-5 years		More than 5 years
Secured bank loans		479		370		38		14		26		31
Commercial papers		1 142		1 142		—		—		—		—
Unsecured bank loans		108		22		—		86		—		—
Unsecured bond issues		107 796		2 626		5 259		8 039		17 180		74 692
Unsecured other loans		71		14		18		7		9		23
Finance lease liabilities		204		42		19		17		12		114

		109 800		4 216		5 334		8 163		17 227		74 860

TERMS AND DEBT REPAYMENT SCHEDULE AT 31 DECEMBER 2017 Million US dollar	Total		1 year or less		1-2 years		2-3 years		3-5 years		More than 5 years
Secured bank loans		502		272		128		18		33		51
Commercial papers		1 870		1 870		—		—		—		—
Unsecured bank loans		892		739		122		31		—		—
Unsecured bond issues		112 837		4 510		9 956		9 389		18 441		70 541
Unsecured other loans		68		15		18		7		3		25
Finance lease liabilities		213		27		29		20		23		114

		116 382		7 433		10 253		9 465		18 500		70 731

FINANCE LEASE LIABILITIES Million US dollar	2018 Payments		2018 Interests		2018 Principal		2017 Payments		2017 Interests		2017 Principal
Less than one year		62		20		42		42		15		27
Between one and two years		37		18		19		42		13		29
Between two and three years		33		16		17		31		11		20
Between three and five years		33		21		12		40		17		23
More than 5 years		151		37		114		146		32		114

		317		112		205		301		88		213

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 as it is one of the primary measures AB InBev’s management uses when evaluating its progress towards deleveraging.

AB InBev’s net debt decreased to 102.5 billion US dollar as of 31 December 2018, from 104.4 billion US dollar as of 31 December 2017. Apart from operating results net of capital expenditures, the net debt is mainly impacted by the acquisition by Ambev of additional shares in Cervecería Nacional Dominicana S.A. (“CND”) following the partial exercise by E. León Jimenes S.A. (“ELJ”) of its put option (0.9 billion US dollar), the payment to Molson Coors Brewing Company related to a purchase price adjustment on the disposal completed on 11 October 2016 of SAB’s interest in MillerCoors LLC and all trademarks, contracts and other assets primarily related to the “Miller International Business” (0.3 billion US dollar), dividend payments to shareholders of AB InBev and Ambev (7.8 billion US dollar), the payment of interests and taxes (7.1 billion US dollar) and the impact of changes in foreign exchange rates (2.1 billion US dollar decrease of net debt).

The following table provides a reconciliation of AB InBev’s net debt as at 31 December:


Million US dollar	31 December 2018			31 December 2017
Non-current interest-bearing loans and borrowings		105 584			108 949
Current interest-bearing loans and borrowings		4 216			7 433

Interest-bearing loans and borrowings		109 800			116 382
Bank overdrafts		114			117
Cash and cash equivalents		(7 074	)		(10 472	)
Interest bearing loans granted and other deposits (included within Trade and other receivables)		(267	)		(309	)
Debt securities (included within Investment securities)		(111	)		(1 328	)

Net debt		102 462			104 391

RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES

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 statement of cash flows 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 2018		108 949			7 433
Proceeds from borrowings		15 111			2 672
Payments on borrowings		(13 925	)		(8 564	)
Amortized cost		47			255
Unrealized foreign exchange effects		(1 837	)		(298	)
Current portion of long-term debt		(2 732	)		2 732
Other movements		(29	)		(14	)

Balance at 31 December 2018		105 584			4 216