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Cuervo Owner JB & Cia. Considers Bond Sale To Finance Bushmills Deal

April 28, 2015

JB & Cia. SA., the family-controlled owner of Jose Cuervo, is planning to sell bonds for the first time, to raise up to $500 million to help finance its acquisition of Bushmills, according to Bloomberg. JB agreed to acquire the Irish whiskey brand from Diageo earlier this year, for $408 million and full ownership of the Don Julio Tequila brand (Diageo already owned 50% of Don Julio). Fitch Ratings has graded the 10-year bonds as BBB—two levels above junk—based on JB’s relatively low leverage, the strength of Jose Cuervo Tequila, and what Fitch called “the relatively stable dynamics of the spirits industry, which is less subject to economic downturns.” On the negative side, Fitch said the rating was constrained by the company’s heavy reliance on the Tequila category, which the ratings agency said currently accounts for 72% of JB’s sales. The addition of Bushmills, the world’s third-leading Irish whiskey brand with annual sales of around 800,000 cases, would reduce Tequila’s share of company business to 68%. Fitch added that the bond issuance would be the company’s only debt.


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