S&P slices Ardagh Group

S&P said it lowered its ratings on Ardagh Group SA, ARD Finance SA, Ardagh Packaging Holdings Ltd., and Ardagh Packaging Group Ltd. to CCC- from B-. The agency also downgraded Ardagh's senior secured debt to CCC- from B- and its unsecured notes and deeply subordinated PIK toggle notes to C from CCC.

Ardagh Group announced it had agreed to new senior debt facilities with Apollo Capital Management LP, which includes a €790 million senior secured term loan; a $250 million (equivalent) senior secured exchange term loan and a senior secured term loan to fund a debt service reserve account. The €790 million and the debt service reserve loan are expected to be drawn down in the second quarter of 2024.

The group may use the exchange loan to purchase payment-in-kind toggle notes that are issued by ARD Finance or senior unsecured notes that are issued by Ardagh Holdings USA Inc. and Ardagh Packaging Finance plc and are held or acquired by Apollo investors. S&P said it would likely consider this transaction as distressed and equivalent to default since a below-par price means investors would get less than promised.

The outlook is stable.

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