AB INBEV - BUY | EUR65(+22%) When high debt is no longer a liability Ever since the acquisition of SABMiller, AB InBev’s debt levels have been a worry for investors, reflected in a higher risk premium and lower valuation. However, in the current high-inflation environment, AB InBev’s debt is a significant source of value creation. While inflation increases top-line and profit figures, it decreases the value of debt. And no other beverages company has the same high debt levels as AB InBev (net debt/EBITDA of 4.0x). However, with an average duration of 16 years and 93% at fixed rates, the company can easily fulfill its debt obligations. In the next 10 years it needs to pay back on average USD2.9bn p.a. compared to an annual free cash flow of over USD10bn. Furthermore, with rising interest rates, AB InBev has the option to buy back debt at significant discounts. On top of that, the currency mismatch (33% of debt is in euros compared to only 4% of revenues and profits) should play to its advantage.