Moody's: Ardagh notes Caa1

Moody's Investors Service said it assigned a definitive Caa1 rating to the €425 million secured payment-in-kind notes issued by ARD Finance SA, a subsidiary of Ardagh Group SA.

The notes have been issued in two tranches of €185 million and $345 million, which mature in 2018.

The outlook is positive.

The definitive rating on this debt obligation confirms the provisional rating that was assigned in May, the agency said.

The terms were the same, but the agency noted that the company decided to upsize the notes by €30 million compared to the initial amount at the time of the bond launch.

The proceeds have been used to repay the existing payment-in-kind notes issued by Ardagh Glass Group and make a distribution to shareholders, Moody's said.

The ratings incorporate the solid scale with sales in excess of €3 billion and solid market positions of the combined group in the rather low-cyclical food and beverage industry, the agency said.

These positive rating drivers are offset by its high leverage following two acquisitions and execution risks, Moody's said, along with its exposure to volatile raw material prices.

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