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S&P rates Ardagh notes B+, CCC+
Standard & Poor’s said it affirmed the B long-term corporate credit rating on Ardagh Packaging Group Ltd. and core subsidiary Ardagh Packaging Holdings Ltd.
The agency also said it assigned a rating of B+ to the proposed $2 billion senior secured notes due 2023 to be issued by Ardagh Packaging Finance plc and Ardagh Holdings USA Inc.
The recovery rating on these notes is 2, indicating 70% to 90% expected default recovery.
S&P also said it assigned a rating of CCC+ to the proposed $850 million senior notes due 2024 to be issued by Ardagh Packaging Finance and Ardagh Holdings. The recovery rating on these notes is 6, indicating 0 to 10% expected default recovery.
The agency also said it affirmed the ratings on Ardagh’s senior secured debt instruments at B+ and the ratings on the group’s senior debt instruments and subordinated payment-in-kind (PIK) notes at CCC+. The recovery ratings on these notes are unchanged at 2 and 6, respectively.
The outlook is stable.
The ratings follow news that Ardagh agreed with Ball Corp. and Rexam plc to acquire 22 metal beverage can and end plants in Europe, the United States and Brazil, as part of a package of disposals designed to meet the regulatory requirements of the Ball/Rexam merger, S&P said.
The acquisition will make Ardagh the third largest global manufacturer of metal beverage cans, complementing its leadership positions in glass beverage packaging and metal food packaging, the agency said.
The company’s business risk profile will be enhanced by these assets as they would add scale and mitigate substitution risk between its mature glass businesses, S&P said.
But, the company’s geographic diversity is largely unchanged and sales depend on low-growth mature western markets, the agency said.
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