Ardagh Group lifts bond deal to $4.5bn
Huge investor appetite helped Ardagh issue a massive $4.5bn (€3.9bn) of bonds and drove down the cost of its acquisition finance to 4.9pc yesterday - extremely low by so-called "junk bond" standards.
The new debt exceeded the original target of $2.9bn and will help fund a $3.4bn acquisition as well as being used to retire more expensive bonds.
Debts carrying interest rates as high as 9.25pc will be refinanced with the new longer dated bonds, the most costly of which carry a 7.25pc coupon.
Ardagh Group chairman Paul Coulson raised the new bonds in a mix of euros and dollars to help turn his glass and metal packaging company into the world's third-largest producer of drinks cans.
He was helped by strong demand, as high yield, or junk, bonds posted the best returns since 2012 in March after the European Central Bank laid out plans to start buying corporate debt as part of its quantitative-easing programme.
The ECB will only buy investment-grade bonds but it spurred a rally in the high-yield market as investors get increasingly desperate to make money.
Since taking over the company in the late 1990s, Mr Coulson (64), has used debt to build Ardagh into the largest glass-container maker in northern Europe and second-largest in the US.
The latest sale of five different bonds - increased to $3.15bn of dollar notes and about €1.2bn of euro notes - will help finance the acquisition of 22 factories in Europe, the US and Brazil.
This week Moody's upgraded the company's credit rating to B2 from B3 after the latest transaction was announced. Ardagh's total debt will rise to €7.7bn after the latest deal.