Moody's rates Rexam securities Ba2

Moody's Investors Service said it assigned a provisional Ba2 rating Rexam plc's proposed issuance of up to £500 million capital securities due 2067.

The outlook is stable.

The company agreed to acquire the rigid plastic packaging operations from Owens-Illinois, Inc. The $1.825 billion transaction will be refinanced with the proceeds of the capital securities, the disposal of its remaining glass activities for €660 million to Ardagh and an equity offering of £286 million. The transaction is expected to close early in the third quarter.

The agency said the acquisition is in line with Rexam's strategy, which encompasses growth in emerging markets and in value-added rigid plastic packaging, and that the activities are complementary to Rexam's existing product portfolio, as it will consolidate its position in a largely fragmented North American market for these products.

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