Businessman Paul Coulson's Ardagh packaging group has moved to refinance up to $1bn worth of debt.
The company, through its subsidiary Ardagh Investments Holdings, has agreed a deal with US alternative asset management firm Apollo Capital.
It will initially see Apollo issue a €790m senior secured term loan to Ardagh, as well as a $250m senior secured exchange term loan facility.
Further senior secured term loans will also be issued by Apollo to fund a debt service reserve account at Ardagh.
The new facilities will mature in 2029 and will be secured on assets of Ardagh Investments Holdings, which owns three quarters of Ardagh Metal Packaging, the group’s US listed drinks can business.
Ardagh Investments Holdings now plans to lend on around $755m of the initial Apollo loans to Ardagh Packaging Finance and Ardagh Holdings.
They will use the money to redeem around $700m of senior notes due to mature next year, which will be replaced by new secured debt being issued by existing issuers that will be due in 2029.
Following the redemption of the notes due next year, Ardagh will not have any bonds maturing before August of 2026.
The $250m exchange term loan facility will also involve an arrangement where Apollo will buy up Ardagh’s riskier bonds due in 2027 and swap them with new loans, but at a premium.
The developments are part of a move by Ardagh to deal with its $12bn of debt, which recently led S&P to downgrade its debt rating further into junk status.
"As disclosed previously, Ardagh continues to evaluate options with its capital structure and, together with its affiliates, may seek to further reduce its debt through discounted open market purchases, tender offers, exchange offers, privately negotiated transactions or otherwise," Ardagh said.
"Such transactions and the terms thereof will depend upon market conditions, liquidity requirements, contractual restrictions and other factors."
The company also said this morning that it expects revenue for the glass packaging business to be around $1bn for the first quarter, down from $1.1bn in the same period last year.
Adjusted EBITDA is expected to be $115-120m for the three months, compared to $209m in the same quarter of 2023, but in line with expectations.
It also said it expects results for the first quarter for Ardagh Metal Packaging will be in line with previous guidance.
