Ardagh Glass cuts cost of borrowing to fund takeover
Firm launches investor roadshow after agreeing €1.7bn deal
Published 02/10/2010 | 05:00
Ardagh Glass and Aryzta have financed takeover deals in the international markets.
Dublin-based Ardagh Glass has placed €1.1bn of euro-denominated bonds and US$800m of dollar-denominated bonds in a deal that finances its €1.7bn takeover of rival Impress.
The takeover was agreed earlier this week and the company immediately launched an investor roadshow in both the US and Europe to convince investors to buy the bonds.
The deal had been fully underwritten by Citigroup, Credit Suisse and JPMorgan, which means the company had secured its money even before the bonds were placed. The sale process, however, was used to determine the interest Ardagh would pay for its mix of secured and unsecured bonds.
The roadshow was well received in the market, allowing the company to pay slightly less than the price guidance investors were initially given for the bonds. The company opted to increase the amount of higher risk unsecured bonds as the price sought by investors fell slightly; it borrowed in both euros and dollars.
The deal was split between €825m of secured bonds that fall due in 2017 paying annual interest of 7.375pc and €275m of unsecured bonds due in 2020 paying 9.25pc. It also included US$350m of secured bonds due in 2017 paying 7.375pc interest, and finally US$450m of unsecured bonds due in 2020 paying 9.125pc.
The bonds will finance the €1.7bn acquisition of Impress and refinance previous debts.
Aryzta, another company with Irish roots, is funding an international acquisition. The Swiss company was created by a merger of IAWS Group with Hiestand Holding two years ago. On Friday, it said it had raised CHF325m (€242m) to back its acquisition of the 50pc it did not already own in US bakery Maidstone.
The financing is in the form of hybrid capital paying 5pc annual interest. Hybrid capital has no specific maturity date, like other bonds it pays regular, agreed interest but is treated as a form of equity under accounting rules.