DIS Walt Disney Co

Brewing giant Anheuser-Busch InBev NV is planning to sell roughly $30 billion in bonds Wednesday in a deal that would rank as the second largest on record, underscoring the strength of the corporate-debt market despite turmoil in certain sectors.

Some investors and analysts say the company, which is buying rival SABMiller PLC for more than $100 billion, could ultimately sell about $55 billion in new bonds to help pay for the acquisition. The company could sell the entire amount in its sale on Wednesday, but investors say it is more likely to sell roughly $30 billion in the U.S. market and the remainder in other currencies overseas or at a later date.

Investors say they expect high demand for the debt, given the company's investment-grade ratings, the relatively high yields that should be offered on the new bonds, and the company's exposure to consumer spending, a bright spot in the U.S. economy. Other big, household names such as Walt Disney Co. and Ford Motor Co. have sold investment-grade bonds this month, demonstrating investor appetite for corporate debt despite price swings in stocks and the market for junk bonds, which carry lower ratings and higher risk.

"In volatile times, the market wants something simple and relatable to invest in," said Matt Brill, a portfolio manager for fixed income at asset manager Invesco Ltd., which oversees roughly $791 billion. "Beer bonds are exactly that."

AB-InBev declined to comment on the sale.

The company's bond sale would signal that the bond boom of the last seven years isn't over yet, despite the Federal Reserve's decision in December to raise interest rates from near zero. Many companies plowed into debt markets in recent years to take advantage of ultralow interest rates, using the proceeds to pay for an acquisitions boom or to buy back stock.

A $30 billion offering would rank behind Verizon Communications Inc.'s $49 billion bond sale in September 2013, but it would beat out a $21 billion offering from Actavis PLC in March of last year.

Portfolio managers tend to like big bond sales from highly rated firms because the bonds, with so many investors owning the debt, are relatively easy to trade. A bond sale of this size will also carry higher yields compared with debt from similar firms because the company needs to entice investors to participate in the sale.

Sentiment in the broader corporate-bond market has improved since mid-December, when a major selloff hit the junk-bond market amid concerns that low commodity prices would push many firms into default. Investment-grade bonds weakened as well. But the market stabilized in the following weeks, with investors saying they expected modest economic growth in the U.S. to continue into 2016, which should help many companies grow their revenue.

Write to Mike Cherney at mike.cherney@wsj.com

(END) Dow Jones Newswires

January 12, 2016 18:15 ET (23:15 GMT)

Walt Disney (NYSE:DIS)
Historical Stock Chart
From Aug 2024 to Sep 2024

Walt Disney (NYSE:DIS)
Historical Stock Chart
From Sep 2023 to Sep 2024