Ardagh takes extra €1.17bn in blow-out bond-deals
IRISH-OWNED Ardagh Group, one of the world’s largest makers of bottles and cans for drinks producers, has raised around €1.17bn more than it was seeking in a series of bond deals over the past two weeks.
Yesterday, Ardagh borrowed €790m as part of a series of deals to refinance its debt at a lower cost. The bond was increased from an initial €440m target on the back of demand from investors. The new bonds due in 2026 will refinance debt that would have fallen due in 2024. The yield, or cost of the debt, is 2.74pc, similar to the interest on the bonds being replaced.
Yesterday’s deal was the third time in the past fortnight that Ardagh had issued a bigger slice of debt than it was initially seeking. On May 26 the group borrowed $1bn after going to the market seeking $600m. Two days after that a planned $400m bond deal was increased to $715m.
The May deals allowed the company to refinance existing debt at lower interest rates.
In April, Ardagh withdrew its financial guidance for the year and boosted its cash reserves to $1.5bn (€1.4bn) to cope with business disruption from Covid-19.
The group’s North American and European operations have been able to carry on without interruption because its workers have been deemed essential in all American and European markets due to their role in ensuring safe delivery of food and drinks.
Ardagh makes cans and glass packaging for food and drink producers. It has 56 plants in 12 countries, employing 16,000 workers.
The money raised from yesterday’s bond deal will be used to redeem €741m of bonds due in 2024.
Ardagh chairman and CEO Paul Coulson said the series of deals in recent weeks means the company has no bond maturities before 2025, and a weighted average debt maturity of six years.