Ardagh Group S.A. (together with its subsidiaries, "Ardagh") announces that its unrestricted subsidiary, Ardagh Investments Holdings Sarl ("AIHS"), has executed definitive documentation for a new senior secured credit facility with certain investment funds and other entities managed by affiliates of Apollo Capital Management, L.P. (collectively, the "Apollo Investors"). The new facility consists of: (i) an initial €790 million senior secured term loan ("Initial Term Loan"); (ii) a $250 million (equivalent) senior secured exchange term loan (the "Exchange Loan"); and additional senior secured term loans in an amount sufficient to fund a debt service reserve account at AIHS (collectively, the "Facilities"). The Facilities are secured on all material assets of AIHS, including a pledge on equity interests of AIHS in Ardagh Metal Packaging S.A. The Facilities will mature in 2029.

AIHS intends to on-lend approximately €755 million of the proceeds of the Initial Term Loan to Ardagh Packaging Finance plc and Ardagh Holdings USA Inc. (the "Existing Issuers") by subscribing to new Senior Secured Notes due 2029 (the "Proceeds Notes") to be issued by the Existing Issuers, which will be used to redeem in full, the $700 million Senior Secured Notes due 2025 (the "2025 Senior Secured Notes") issued by the Existing Issuers.

AIHS is permitted, at its option, to issue Exchange Loans for Senior Secured Toggle Notes due 2027 (the "PIK Notes") issued by ARD Finance S.A. (the "PIK Issuer") or senior unsecured notes issued by the Existing Issuers (the "Senior Unsecured Notes") that are held or acquired by one or more Apollo Investors. Each Exchange Loan will be issued in a principal amount equal to the purchase price paid by the Apollo Investors for the exchanged PIK Notes and/or the Senior Unsecured Notes, as applicable, plus an agreed premium.

The Facilities and the Proceeds Notes are each on customary terms for third-party indebtedness and preserve the flexibility for Ardagh in the currently outstanding debt of the Existing Issuers, including the ability to make investments and to incur debt, other than restricting Ardagh's ability to pay dividends and other distributions, which will prevent the PIK Issuer from paying cash interest on the PIK Notes for all interest periods after June 30, 2024.

The Facilities are expected to be drawn down in the second quarter of 2024. Following the redemption of the 2025 Senior Secured Notes, Ardagh will have no bond maturities arising before August 2026. 

As disclosed previously, Ardagh continues to evaluate options with its capital structure and, together with its affiliates, may seek to further reduce its debt through discounted open market purchases, tender offers, exchange offers, privately negotiated transactions or otherwise. Such transactions and the terms thereof will depend upon market conditions, liquidity requirements, contractual restrictions and other factors.

Recent Developments

Revenue for Ardagh's glass packaging business ("Ardagh Glass Packaging") is expected to be approximately $1.0 billion in the three months ended March 31, 2024, compared with $1.1 billion in the same period last year. Ardagh Glass Packaging's Adjusted EBITDA is expected to be $115-120 million in the three months ended March 31, 2024,  in line with its expectations, compared with $209 million in the same period last year.

Net leverage for Ardagh's restricted group under its existing bond documentation (the "ARGID Restricted Group") as of March 31, 2024 is expected to be approximately 7.5x LTM Adjusted EBITDA, including dividends received from Ardagh Metal Packaging S.A., compared to 6.8x as of December 31, 2023. Liquidity as of March 31, 2024 remained strong at approximately $0.6 billion compared to $0.7 billion as of December 31, 2023.

Ardagh Metal Packaging S.A.'s results for the three months ended March 31, 2024 are expected to be in line with previously-issued guidance.

Ardagh expects to release its first quarter results on April 25, 2024.

Ardagh's financial advisor is Houlihan Lokey and its legal advisor is Kirkland & Ellis LLP.

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