$2bn Ardagh bond deal cuts debt bill ahead of share sale

ARDAGH Group has raised $2.2bn (€2.07bn) on the bond market in what will be its last big deal ahead of a longplanned IPO.

The latest move sees Ardagh reduce borrowing costs and extend terms on a portion of its debt pile at rates ranging from 2.7pc to 5.7pc. The deal was to refinance a portion of Ardagh’s net debts of €7bn.

The company said yesterday that the total raised was increased on the back of demand from a planned $1.9bn (€1.79bn) in response to strong demand. The refinancing will cut Ardagh’s annual debt servicing bill by €22m, the firm said.

Ardagh is the latest Irish corporate to look to lock in current low borrowing costs. Telecoms operator Eir is in the market at the moment to refinance €1.6bn of relatively expensive senior loans with a new syndicated issue.

Ardagh’s new deal is priced with a coupon, or annual interest charge of 2.75pc for seven-year secured euro denominated bonds, and 5.75pc for eight-year unsecured US dollar debt.

That is a new low in funding costs for Ardagh, which has traditionally funded growth and acquisitions on the bond market. The deal comes ahead of an initial public offering (IPO) of shares that the packaging group said last week is planned for the New York Stock Exchange later this quarter.

Davy Stockbrokers has been named alongside Citigroup, Goldman Sachs, Credit Suisse and JP Morgan as bookrunners on the planned share sale.

Ardagh founder and chairman Paul Coulson has said he’s planning to raise around $300m (€283m) by selling around 5pc of shares in the company in what will be a relatively small equity raise. Proceeds will go to reduce debt.