Moody's rates Ardagh notes B3, cuts view to stable

Moody's Investors Service said it affirmed Ardagh Packaging Group plc's corporate family rating and probability of default rating at B2.

The outlook was revised to stable from positive.

Moody's also said it assigned a provisional B3 (LGD 5, 73%) rating to the proposed $250 million senior unsecured notes due 2020.

All other instrument ratings, including the Ba3 (LGD 2, 23%) rating on its $375 million senior secured notes due in 2017 were affirmed.

The proceeds from the proposed issuance are expected to remain within the group initially, though Moody's said it understands that Ardagh is in advanced negotiations for the potential acquisition of two bolt-on companies in the packaging segment.

The proceeds would be used to fund the purchase price should these acquisitions materialize, the agency said.

The change in outlook reflects the group's continued debt financed acquisition activity that results in a materially slower-than-expected pace of deleveraging, Moody's said.

While the incremental debt amount is moderate compared to the group's total debt load, the agency said it cautions that in combination with lower-than-expected operating performance of the existing business, Ardagh will not achieve credit metrics commensurate with a higher rating in the short term.

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