Ardagh targets US$500m in equity-linked bonds

Mon Mar 17, 2014 1:22pm EDT

LONDON, March 17 (IFR) - Ardagh announced in its annual results presentation today that it has resumed efforts to raise equity-linked securities, as its long-stalled acquisition of US glass maker VNA nears completion.

Ardagh stressed that "there is no assurance that any such transaction will be completed," but it confirmed that it is looking to raise an equity-linked instrument at an entity at or above ARD Finance S.A.

The instrument could take the form of a mandatory convertible security, and it is Ardagh's intention to raise primary proceeds of more than US$500m.

ARD Finance S.A. is a direct subsidiary of Ardagh Group S.A., and the holder, indirectly, of 100% of the share capital of Ardagh Packaging Holdings. It was previously used in 2011 to issue 185m and US$345m of senior payment-in-kind notes due in 2018, carrying 11.125% coupons.

As of January 2014, Ardagh's chairman Paul Coulson owned 21% of the Ardagh Group's share capital directly through a company, which also has a further 39% interest through its investment in the Yeoman group of companies. Ardagh's directors and senior management, other than Coulson, collectively own around 20% of the group.

Ardagh was last in debt markets with its rejigged VNA acquisition deal. Ardagh raised US$1.6bn in high-yield bonds in January 2013 to back the deal initially, but was forced to return this cash to bondholders a year later, after it failed to meet a crucial deadline with US regulators.

In the rejigged acquisition debt deal raised in January 2014, Ardagh funded the senior secured portion with a US$700m term loan B, along with US$415m of 2019 senior unsecured paper and US$415m of 2021 senior unsecured paper.

The deal was delayed after the Federal Trade Commission blocked the deal on antitrust grounds, but Ardagh now says it has reached agreement on the basic terms of a proposed consent agreement. As such, Ardagh expects to close the deal before April 30. (Reporting by Robert Smith, editing by Alex Chambers and Matthew Davies.)