Ardagh’s pari-plus
transaction backed by Apollo evokes memories of Envision Healthcare’s
phase-one, AmSurg transaction, as the packaging manufacturer declined a proposal from an ad hoc secured noteholder group and chose to transact with a third-party investor instead, according to sources.
Notably, the company
highlighted today in its press release the preservation of flexibility in the currently outstanding debt, including investment and debt capacities, the terms of which existing creditors potentially would like to tighten, the sources said. Terms of the ad hoc secured group’s proposal could not be learned on Monday.
The unsub deal features the recent liability management technologies pari plus, with the initial term loan backed by proceeds notes back to the existing issuers as well as AIHS’s assets of equity stakes in Metal Packaging.
The transaction bodes ill for existing creditors, especially HoldCo PIK notes and ARGID unsecured notes, as the new facilities have grabbed the economics of the Metal equity stakes. Market participants had been hypothesizing whether they would be used to facilitate a comprehensive refinancing or discounted debt swaps.
But it appears that Ardagh, with the help of Kirkland & Ellis and Houlihan Lokey, has chosen to maintain optionality and give the glass business time to recover by handling only the very front end of the maturities for now. The company noted today it may execute discounted open market purchases, tender offers, exchange offers, privately negotiated deals as it continues to evaluate capital structure options.
Ardagh did not respond to requests for comment.