Ardagh Glass: sale of bonds for company restructuring

Ardagh Glass has announced the sale of bonds due in 2016 expected to raise GBP 300 million to restructure company debts.
The proposed bond sale is aimed at improving liquidity headroom for general b…

Ardagh Glass has announced the sale of bonds due in 2016 expected to raise GBP 300 million to restructure company debts. The proposed bond sale is aimed at improving liquidity headroom for general business purposes as well as to push out the dates of loans falling due by exchanging existing bank debt for longer-term debt sourced in the bond markets. Ardagh plans to refinance GBP 150 million of senior secured term loans with a final maturity in 2014 along with repaying debts owing under the company“s senior secured revolving credit facilities. Ratings agency Moody“s affirmed the firm“s overall rating, saying it expected gradual recovery in earnings following a weak first quarter 2009 and assigned a provisional Ba3 rating to the proposed sale of the seven-year bonds. Moody“s added that that it expects earnings to stabilize in the second half of 2009 even if earnings were affected by lower volumes and substantial restructuring costs. The agency also said it expects Ardagh to generate positive cashflow through 2009, supported by a reduction of capital expenditure and unwinding of working capital. The collateral guaranteeing the new bonds will comprise the same assets securing the company“s existing senior secured credit facility, with the exception of certain German charges on land. Ardagh Glass operates 20 manufacturing facilities in seven countries. The company, which was established as the Irish Glass Bottle Company in 1932, employs more than 6,500 people and produces more than 12 billion glass containers every year. The company is currently locked in a dispute with Quinn Glass, part of the Quinn Group.