Cheap again
After a brief pause in May, money is once more being thrown at borrowers
CONSTELLATION BRANDS is a serial acquirer of well-known names in the alcoholic-drink trade. No sooner has it digested one and tidied up its balance sheet than it takes on more debt, ready to buy the next. Ordinarily, this practice would add to its borrowing costs. Not now. On July 28th, it repriced more than $1 billion-worth of loans, on terms normally reserved for investment-grade companies: just 1.5 percentage points over LIBOR (London Interbank Offered Rate: the interest rate at which international banks lend to one another). This followed a previous deep cut in the company's borrowing costs only last November.
This article appeared in the Finance & economics section of the print edition under the headline “Cheap again”
From the July 31st 2004 edition
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