New Issue: Ardagh places $1.42 billion and €700 million notes in three-part debt refinancing deal

By Paul A. Harris

Portland, Ore., Feb. 24 – Ireland’s Ardagh Group priced $1.42 billion and €700 million of high-yield notes in a three-part deal on Friday, according to market sources.

The transaction included an upsized €750 million amount of seven-year senior secured notes (Ba3/BB-), which priced at par to yield 2¾%. The issue size was increased from €500 million. The yield printed on top of yield talk and at the tight end of early guidance in the high 2% area to 3%.

The secured portion of the deal also included an upsized $715 million of restructured 5.5-year notes (Ba3/BB-), which priced at par to yield 4¼%. The tranche was upsized from $700 million. The maturity was increased to 5.5 years from five years. The yield printed on top of yield talk in the 4¼% area.

The unsecured portion of the deal was comprised of a $700 million add-on to the Ardagh Packaging Finance plc and Ardagh Holdings USA Inc. 6% senior notes due Feb. 15, 2025 (B3/CCC+), which priced at 101.5 to yield 5.761%. The reoffer price came at the rich end of the 101.25 to 101.5 price talk.

The overall transaction was increased to $2.22 billion equivalent from $1.90 billion equivalent.

Citigroup was the left bookrunner for all three tranches.

Ardagh Packaging Finance and Ardagh Holdings USA are the issuing entities for all three tranches.

The Dublin-based supplier of glass and metal packaging plans to use the proceeds to call its $415 million of 6¾% senior notes due 2021 and its $265 million first priority senior secured floating-rate notes due 2019 in full, as well as to repay its $663 million term loan B in full, redeem €750 million of 4¼% first priority senior secured notes due 2022 with a make-whole call, and add cash to the balance sheet.

Issuers:	Ardagh Packaging Finance plc and Ardagh Holdings USA Inc.
Amount:	$1,415,000,000 and €700 million
Left bookrunner:	Citigroup
Trade date:	Feb. 24
Settlement date:	March 8
Distribution:	Rule 144A and Regulation S for life
Marketing:	Quick to market
Euro-denominated secured notes
Amount:	€750 million, increased from €500 million
Maturity:	March 15, 2024
Securities:	Senior secured notes
Bookrunners:	Citigroup, Goldman Sachs, JPMorgan
Coupon:	2¾%
Price:	Par
Yield:	2¾%
Spread:	243 bps
Call:	Make-whole call at Bunds plus 50 bps until March 15, 2020, then callable at 101.375
Equity clawback:	40% at 102.75 until March 15, 2020
Ratings:	Moody's: Ba3
	S&P: BB-
Price talk:	2¾% to 3%
Dollar-denominated secured notes
Amount:	$715 million, increased from $700 million
Maturity:	Sept. 15, 2022
Securities:	Senior secured notes
Bookrunners:	Citigroup, Goldman Sachs, JPMorgan
Coupon:	4¼%
Price:	Par
Yield:	4¼%
Spread:	244 bps
Call:	Make-whole call at Treasuries plus 50 bps until March 15, 2019, then callable at 102.125
Equity clawback:	40% at 104.25 until March 15, 2019
Ratings:	Moody's: Ba3
	S&P: BB-
Price talk:	4¼% area
Unsecured notes
Face amount:	$700 million
Proceeds:	$710.5 million
Maturity:	Feb. 15, 2025
Security description:	Add-on to 6% senior notes due Feb. 15, 2025
Bookrunners:	Citigroup, BofA Merrill Lynch, Deutsche Bank
Coupon:	6%
Price:	101.5
Yield:	5.761%
Spread:	352 bps
Call:	Make-whole at Treasuries plus 50 bps until Feb. 15, 2020, then callable at 104.5
Equity clawback:	40% at 106 until Feb. 15, 2020
Ratings:	Moody's: B3
	S&P: CCC+
Price talk:	101.25 to 101.5
Original issue:	$1 billion priced at par on Jan. 19, 2017
Fungibility:	Add-on notes will become fungible with original notes
Total issue size:	$1.7 billion

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