(Updates throughout)
By Davide Scigliuzzo
NEW YORK, April 29 (IFR) - Investors on both sides of theAtlantic clamored for Ardagh's US$4.5bn bond sale this week,hoping that the packaging company's latest acquisition willfinally pave the way for an IPO.
Ardagh received around US$20bn in orders for its offering ofunsecured and secured bonds in US dollars and euros, two peoplefamiliar with the situation told IFR on Friday.
The five-part bond will help finance its US$3.42bnacquisition of metal can plants from Ball and Rexam, which hadto dispose of the assets ahead of their planned merger.
"These are high-quality assets," said one European investor."Ball and Rexam didn't cherry-pick assets they wanted [to get]rid of ... and the synergies have projected are veryconservative."
Investors long frustrated by Ardagh's unsuccessful attemptsto go public believe the company's latest push to increase thesize of its metal cans business could finally tilt the balance.
"In my mind this makes it more of a game-changer," saidDarren Hughes, co-head of high-yield investments at Invesco.
"Everyone is anticipating a future equity offering, and thatis going to be where the return is."
Strong inflows into high-yield funds - at a time when supplyis still sharply down from last year - also helped drive demandfor the trade, which saw pricing tighten across all tranches.
The unsecured portion quickly became a hit, allowing thecompany to launch a US$1.65bn eight-year non-call three at afinal yield of 7.25%, well inside initial whispers of around 8%.
In the secureds, a US$1bn seven-year non-call threefixed-rate was launched at 4.625%, tight to 5% area whispers,while a US$500m five-year floater was set to price at 325bp overLibor.
In the euro market, the company launched a EUR440m securedtranche at 4.125% and a EUR750m unsecured portion at 6.75%,tight to whispers of 4.5% and 7% respectively.
Ardagh will use any excess proceeds from the bond sale torepay some of its US dollar and euro-denominated bonds maturingin 2020.
Citi was sole bookrunner on the secured tranches andleft-lead on the unsecured bonds, with Barclays, Goldman Sachsand Deutsche Bank as joint bookrunners. (Reporting by Davide Scigliuzzo; Additional reporting by RobertSmith; Editing by Natalie Harrison and Marc Carnegie)
