Moody’s upgrades Ardagh

Ardagh got a boost on Wednesday from leading credit ratings agency Moody’s, which upgraded its stance on the heavily-indebted company on the back of its plan to carry out a $3.4 billion (€3 billion) deal.

Moody's said that Ardagh's planned purchase of a beverage can manufacturing business from US packaging giant Ball Corp and UK rival Rexam gives the Irish-led company "significant scale and market position."

While Ardagh’s corporate family rating has been increased to “B2” from “B3” at Moody’s, this remains well within what the ratings firm views a “junk”, or “non-investment” grade. Ardagh is currently seeking to sell $2.8 billion of bonds to finance the deal.

Moody's said the outlook on Ardagh's ratings is stable, reflecting a view the group, where financier Paul Coulson is executive chairman and holds a 36 per cent stake, won't attempt further debt-financed deals until the Ball-Rexam assets are absorbed into the group.

Meanwhile, S&P, another of the world’s three largest ratings firms, reiterated its “B” rating and stable outlook on Ardagh.

“We believe that the acquisition can be accommodated for within the current ratings, as the group’s already highly leveraged credit metrics are not significantly impacted over our forecast period,” S&P said.

Mr Coulson told bond analysts on Monday he plans to revisit plans to raise millions of euros of equity after agreeing its largest-ever deal. This would serve to reduce the glass and metal containers manufacturer’s debt levels relative to earnings.