Ardagh sets final sizes, pricing for €1.19 billion notes in upsized $4.5 billion five-part deal

By Paul A. Harris

Portland, Ore., April 29 – Ardagh Group set final sizes and pricing on €1.19 billion offering of notes, which are part of its massively upsized $4.5 billion five-part bond deal, according to a syndicate source.

The euro portions of the deal feature €440 million of seven-year secured fixed-rate notes (Ba3/B+), coming to yield 4 1/8% (previous yield talk was 4¼% area), and €750 million of eight-year unsecured fixed-rate notes (B3/CCC+), coming to yield 6¾% (previous talk was in the 7% area).

As reported, the deal also includes $500 million of five-year floating-rate notes, which come with one year of call protection and are talked with a 325 basis points spread to Libor at a price of 99 to 99.5. The floating-rate tranche was added subsequent to the announcement of the deal, which began a roadshow early in the present week.

$1 billion of the seven-year secured notes (Ba3/B+) are talked to yield in the 4¾% area.

And $1.65 billion of unsecured eight-year notes (B3/CCC+) are talked in the 7½% area.

The dollar-denominated secured notes were originally whispered in the low 5% context, and the euro-denominated secured notes were originally whispered in the mid 4% context, sources said.

The dollar-denominated unsecured notes were whispered in the low 8% context, while the euro-denominated notes were whispered to yield 250 bps higher than the euro-denominated secured notes.

Books are closed, and the deal, the overall size of which was increased from $2.85 billion equivalent, is set to price on Friday. Earlier in the week, timing on the Rule 144A and Regulation S for life deal was accelerated, with the originally planned roadshow – which had been set to carry into the week ahead – being cut short.

Citigroup is the bookrunner for the secured notes tranches. Barclays, Goldman Sachs and Deutsche Bank are the co-managers.

Citigroup is the left bookrunner for the unsecured notes tranches. Barclays, Goldman Sachs and Deutsche Bank are the joint bookrunners.

The seven-year secured fixed-rate notes become callable after three years at par plus 50% of the coupons.

The eight-year unsecured notes become callable after three years at par plus 75% of the coupons.

Proceeds will be used to help finance the acquisition of assets from Ball Corp. and Rexam plc. The acquisitions include certain metal beverage can manufacturing assets and support locations in Europe, the United States and Brazil. They will be purchased by Ardagh when Ball’s proposed acquisition of Rexam becomes complete.

The additional proceeds resulting from the $1.65 billion upsizing of the deal are expected to be used to repay Ardagh’s dollar-denominated unsecured 9 1/8% notes due 2020 in two tranches and euro-denominated 9¼% notes due 2020.

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