Ardagh raises €2.3bn as investors pile into bond deal
Published 21/06/2014 | 02:30
Glass-maker Ardagh increased a €1.8m debt offer last night by $680m (€500m) as investors scrambled for a piece of the action.
The company, headed and controlled by Dublin financier Paul Coulson, took advantage of a strong appetite among investors in order to refinance existing debt instruments that fall due in 2017.
But while it initially intended to issue €1.8bn in debt, Ardagh quickly decided to issue the additional $680m to fuel a heavily over-subscribed offer.
The latest debt issue by the company will save it at least $70m (€51m) a year in interest repayments. Combined with a separate debt issue earlier this month, Ardagh's annual interest payment savings have topped $90m (€66m).
Mr Coulson reaped a €33m dividend from this month's previous debt issue, but no dividend will be paid from yesterday's debt sale.
The latest debt issue also comes just days after the US Federal Trade Commission (FTC) approved the sale of six Anchor Glass plants in the US that are owned by Ardagh.
Ardagh is selling those facilities as part of a deal with the FTC competition watchdog to seal approval for the purchase of Verallia North America from French industrial giant Saint-Gobain.
Those six plants are being sold for about $500m (€368m) to New York private equity firm KPS Capital Partners – the owner of Waterford Crystal. Last year, the FTC had sought to block the acquisition of Verallia by Ardagh amid competition concerns.
Following months of negotiations, Ardagh agreed to sell six factories it had acquired as part of its purchase of Anchor Glass in 2012. The sale of those factories to KPS should be completed by the end of this month, or early July.
Under its latest debt offer Ardagh raised €1.15bn in notes that will mature in 2022 and $430m in notes that will fall due in 2019. An additional $440m of notes were issued that will mature in 2021. At the time of going to print last night, it wasn't known how the additional $680m debt issue was structured.
Earlier this month, Ardagh raised just over $1bn via so-called payment-in-kind (PIK) notes. Those proceeds were used to pay a €100m dividend to shareholders.