- Flickr / torbhakhopper
Big-ticket takeovers are generating huge financing deals for Wall Street.
The Anheuser-Busch InBev-SABMiller deal, announced November 11, has the biggest loan package in the history of Wall Street attached.
The deal will be financed with a $75 billion loan package, made up of five tranches.
For the banks that worked on the loan deal, it translates to a payout of about $200 million, according to Jeffery Nassof of Freeman and Co., an industry consulting group.
These types of financing packages are driving subsequent bond deals. A large chunk of the AB InBev-SABMiller loan package is expected to be refinanced in the bond market in the future.
Broadly, companies have issued a record $989 billion in corporate bonds this year, according to Dealogic.
It could be better still for Wall Street, but one piece of the M&A-debt puzzle that generates the biggest profits for Wall Street – the private-equity industry – is mostly still absent. PE firms have scaled back big bets after so many huge precrisis buyouts flamed out.
Because leveraged buyouts are riskier than corporate deals, the related financing packages are harder to pull off. That, of course, means that the banks get paid more for taking them on, Nassof said – a lot more.
“That’s where you see the highest revenue,” Nassof said.