Silgan inks $1B term loan A for refinancing, upsizes revolver to $1.5B

Silgan Holdings completed an amendment to its senior secured credit facility to extend maturities, upsize its revolver and refinance debt used for recent acquisitions.

Via the amendment, the company extended the maturity of its term loan A to November 2027, from May 2024, and of its revolver to November 2026, from May 2023. The multicurrency revolver was also increased to $1.5 billion, from $1.2 billion.

Pricing is tied to total net leverage. For the TLA the margin is in a range of L+125-175, and for the revolver the range is L+100-150.

Wells Fargo is administrative agent for the facilities.

Proceeds from the $1 billion term loan will be used to refinance $400 million outstanding of the existing TLA due May 2024 that supported the acquisition of the dispensing operations of the Albéa Group in 2020 and $600 million of revolver borrowings that were used to fund three acquisitions in 2021. As of Sept. 30, there was $910 million drawn on the revolver.

To reflect the increase in secured debt in the capital structure, S&P Global Ratings on Nov. 9 lowered ratings on Silgan's outstanding senior unsecured note issues, of which there are four, to BB-, from BB, and revised the recovery rating to 6, from 5. The BBB- issue-level rating and 1 recovery rating on the company's $500 million issue of 1.40% secured notes due 2026, issued in February to repay a portion of the TLA, were affirmed and the BB+ issuer rating and stable outlook are unchanged. The new TLA and revolver are not rated.

The issuer is rated Ba2 by Moody's and BB+ by Fitch, with stable outlooks.

Silgan Corp. is a supplier of sustainable rigid packaging for consumer goods products.