Ardagh Metal Packaging guides $2.65B-equivalent green bond offering

Ardagh Metal Packaging SA has released price talk on its $2.65 billion-equivalent, four-part, cross-border green bond deal with no change from initial price thoughts that emerged yesterday. Books will close at 3 p.m. GMT / 10 a.m. ET today. The structure therefore remains guided as follows:

• $600 million (dollar-denominated) of 7.5-year (non-call three) secured notes at 3.25% area
• $550 million-equivalent (euro-denominated) of 7.5-year (non-call three) secured notes at 2% area
• $1 billion (dollar-denominated) of 8.5-year (non-call three) unsecured notes at 4% area
• $500 million-equivalent (euro-denominated) of 8.5-year (non-call three) unsecured notes at 3% area

Citi is sole green structuring adviser and lead bookrunner, and BofA Securities and Deutsche Bank are joint bookrunners.

The new secured bonds include a special redemption feature, namely the ability to redeem 10% of the original issue at 103% during each calendar year during the first three years.

The "green" element of the bonds comes as the company intends to use proceeds to finance or refinance eligible green projects in accordance with the Ardagh Group Green Financing Framework.

Fitch Ratings has assigned Ardagh Metal Packaging an expected first-time long-term issuer default rating of B+ (EXP) with a stable outlook. The agency has also assigned AMP's upcoming notes an expected senior secured rating of BB+(EXP)/RR1/100% and a senior unsecured rating of BB-(EXP)/RR3/59%.

On Feb. 23, Ardagh Group SA and Gores Holdings V Inc., a special purpose acquisition company sponsored by an affiliate of The Gores Group, announced that they had entered into a definitive business combination agreement under which Gores Holdings V will combine with Ardagh's metal packaging business that will be held by Ardagh Metal Packaging SA, or AMP, to create an independent public company. AMP intends to apply to list its shares on the New York Stock Exchange under the new ticker symbol AMBP.

Ardagh will retain a stake of roughly 80% in AMP and receive up to $3.4 billion in cash in the transactions. The combined company is expected to have an enterprise value of about $8.5 billion at closing, representing 10.5x AMP's projected 2022 adjusted EBITDA, according to a statement.

The new debt raise, which supports the merger, represents a leverage multiple of 3.3x, according to the statement. AMP expects to double adjusted EBITDA to more than $1.1 billion in 2024, from $545 million in 2020.

The proposed business combination — which has been unanimously approved by the boards of directors of both Ardagh and Gores Holdings V — is expected to close in the second quarter of 2021. On the closing of these transactions, in addition to its holding in AMP, Ardagh will retain 100% ownership of its glass packaging business as well as its 42% stake in Trivium Packaging BV. The cash proceeds from the transactions will be used to reduce net debt at Ardagh.

AMP will hold Ardagh's metal packaging business, which is a supplier of beverage cans globally, with a particular focus on the Americas and Europe. AMP operates 23 production facilities in Europe and the Americas, and recorded revenue of $3.5 billion in 2020.

Founded in 1987 by Alec Gores, The Gores Group is a global investment firm. Gores Holdings V and The Gores Group are separate entities with separate management. Gores Holdings V completed its IPO in August 2020, raising roughly $525 million in cash proceeds.