Ardagh secures lower interest rate on fresh finance for VNA deal
Group confirms raising of €1.13 billion
Packaging group, Ardagh, has secured $1.53 billion (€1.13 billion) in fresh finance.
Packaging group, Ardagh, will pay less interest on the €1.13 billion that it is borrowing to fund its proposed purchase of US group, Verallia North America (VNA), than on the bonds it issued to pay for the same deal 12 months ago.
Earlier this month the Luxembourg-based, Irish-backed group repaid €1 billion in bonds originally issued in 2013 to fund the VNA deal, which it announced a year ago, after the deadline for completing the purchase passed on January 17th.
The group yesterday confirmed that it has secured $1.53 billion (€1.13 billion) in fresh finance through a $700 million term loan and bonds due in 2019 and 2021 to fund the transaction, which is now timed to go ahead at the end of April.
The average interest on these loans will be 5.4 per cent, compared to around 6 per cent for the original bond issue. The group said that the new finance will “substantially reduce the interest cost of funding the acquisition of VNA”.
The US Federal Trade Commission objected to the deal on competition grounds midway last year. Ardagh subsequently offered to sell the Florida- based Anchor Glass business that it bought in 2012 as a settlement.