S&P rates Silgan Holdings loan BB+

Standard & Poor's said it assigned its BB+ bank loan and 2 recovery ratings to Silgan Holdings Inc.'s proposed €200 million incremental term loan facility.

The agency said it also assigned BB+ bank loan and 2 recovery ratings to wholly owned subsidiary Silgan Plastics Canada Inc.'s recent C$45 million term loan facility, which is guaranteed on a secured basis by Silgan Holdings Inc. and substantially all its U.S. subsidiaries.

At the same time, S&P said it revised the recovery ratings on the existing tranches of Silgan's credit facility to 2 from 3, noting that the improved recovery prospects reflect its belief that the company's EBITDA in a simulated payment default scenario and the emergence multiple following a reorganization would be somewhat higher than previously thought.

The ratings on Silgan are supported by its satisfactory business position as a major North American producer of rigid consumer goods packaging, fairly steady earnings and free cash flow generation and demonstrated commitment to maintaining a capital structure consistent with the ratings, S&P said, adding that these attributes are offset by still somewhat aggressive financial policies that reflect the business and financial risks associated with its strategy of growth via acquisitions.

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