Ardagh secures ratings upgrade as refinancing continues

Bond proceeds will be used to redeem notes due in 2021

Ardagh Group, the glass and metal containers giant built up by Irish financier Paul Coulson over the past two decades, has secured a rating upgrade from Standard & Poor's on Friday as it continued to overhaul its financial structure.

The group sold £400 million (€458 million) of 10-year unsecured bonds on Friday with an aim of using the proceeds to redeem $500 million (€443 million) of senior secured notes that were originally due to mature in 2021. The new notes will carry an interest rate, or coupon, of 4.75 per cent.

“This transaction is consistent with the group’s aim to continually optimise its capital structure,” Ardagh said. “Following the completion, Ardagh will have not debt maturities before 2021 and an average maturity of 6.9 years.”

The company, which raised more than $350 million in March through an initial public offering and New York Stock Exchange listing, also announced on Friday that it was redeeming €405 million senior secured notes that had been due to mature in 2022.


S&P moved following the announcement to upgrade its rating on Ardagh’s unsecured debt by one level to ‘B’ – still five levels below what the ratings firm considers to be “investment grade”.

Mr Coulson and Ardagh's chief executive Ian Curley have been by far the most active Irishmen in the global capital markets over the past 14 months.

They started off with a $4.5 billion debt sale in April 2016 to fund the $4.2 billion acquisition of a beverage cans business and refinance some of its more expensive debt. The operation was bought from US packaging group Ball Corp and UK rival Rexam as they went about merging.

The group has since refinance further billions of dollars of bonds through a number of deals to lower its interest bill and extend the lifespan of its €8 billion-plus debt mountain.

“Aside from its leading position in the consolidated glass and metal packaging markets in Europe and the Americas, one of the key strengths of Ardagh has been the effective management of its balance sheet,” said Barry Dixon, an analyst with Davy in Dublin, in a note to clients on Friday.

Ardagh, which traces its roots to the formation of the now-defunct Irish Glass Bottle Company in 1932, has been transformed by a series of acquisitions over almost two decades under Mr Coulson. It currently operates 109 facilities in 22 countries, employs about 23,500 people and has global annual sales of about €7.7 billion.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times

Peter Hamilton

Peter Hamilton

Peter Hamilton is a contributor to The Irish Times specialising in business