Article rewritten and expanded from original by Laura Benitez, as published on IFR: https://www.ifre.com/bonds/2345253/price-talk-size-timing-for-ardagh-metal-packaging-eur-usd-jan-2031-nc2-green-ssn
Title: Ardagh Metal Packaging Returns to Market with Dual-Tranche Green Bond Offering Due January 2031
Irish packaging manufacturer Ardagh Metal Packaging (AMP) has returned to the bond markets with a new dual-tranche green secured senior notes (SSN) issuance targeted at refinancing existing debt, bolstering liquidity, and supporting sustainability objectives. The offering, split across euro and US dollar tranches, is structured with a maturity date of January 2031 and a non-call period of two years.
Market sources indicate AMP is currently in price discovery mode on both tranches, gauging investor demand and fine-tuning yields against volatile credit conditions amid a broader shift in the fixed income landscape.
Overview of the Issuance
– Issuer: Ardagh Metal Packaging
– Instrument: Green Senior Secured Notes (SSNs)
– Maturity: January 1, 2031
– Non-call period: Two years (until January 2026)
– Currency: Dual-tranche issuance in euros and US dollars
– Use of proceeds: Debt refinancing and environmentally-aligned capital allocation (green projects)
– Lead banks: Citi and Deutsche Bank as joint global coordinators and active bookrunners; Goldman Sachs and BNP Paribas also active
Price Talk
While the bonds are still in the marketing phase, preliminary indications suggest:
– US dollar tranche is being discussed at a yield in the high 8 percent area
– Euro tranche initial price thoughts are in the low-9 percent region
These price levels underscore the ongoing appetite for high-yield green paper, especially from issuers with a clear environmental profile backed by tangible ESG-linked capital deployment plans.
Credit Profile and Structure
AMP, a leading supplier of sustainable and recyclable metal beverage cans, is well-positioned within the consumer staples sector. This defensive market positioning offers some insulation against macroeconomic turbulence.
– Sector: Packaging, with a focus on 100 percent recyclable aluminum cans
– Parent Company: Ardagh Group S.A., a global packaging supplier
– Credit Ratings: B2/B/B+ (Moody’s/S&P/Fitch) profile, although rating actions for this tranche are pending
– Collateral: The notes will be secured, benefitting from guarantees from select subsidiaries
– Green Bond Framework: Aligned with ICMA’s Green Bond Principles, externally reviewed and second-party opinion provided
Use of Proceeds
Ardagh Metal Packaging has a clearly articulated green strategy, which it intends to fund with this latest bond issuance. The proceeds will primarily be allocated to:
– Refinancing existing high-interest debt from prior issuances including the 3.25 percent 2027 euro SSNs
– Investing in eco-efficient manufacturing upgrades, including low-carbon production methods
– Supporting renewable energy transitions at production sites
– Enhancing recycling initiatives and sustainable packaging designs
The issuer has pledged rigorous transparency in allocation reporting and environmental impact, which will be published annually in a dedicated green bond allocation and impact report.
Market Context and Comparables
The issuance follows a year of volatility in both high-yield and ESG bond markets. Investors remain selective, scrutinizing balance sheets and sustainability credentials more closely.
Recent comparable deals have set the backdrop for AMP’s return to capital markets:
– CANPACK, a fellow aluminum beverage can producer, priced green SSNs at 7.125 percent earlier this year
– Ball Corporation executed a series of bond offerings last year, also linked to sustainability metrics, albeit with investment-grade ratings
However, AMP’s lower credit rating and relatively higher leverage mean the company must pay a premium to attract investors in the current environment, especially with benchmark yields rising and spreads widening in the wake of shifting central
Read more on EUR/USD trading.