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Banking industry

Ball Corp. Secures $500 Million Financing for US and Argentinean Operations Acquisition

Strategic Insights

— 2 min read

Ball Corp. has secured a commitment from JPMorgan and Deutsche Bank for $500 million in senior secured financing to support its acquisition of US Can Corp.'s US and Argentinean operations. The acquisition terms include the issuance of 1.1 million shares of Ball's stock and the assumption of US Can's debt, which will be refinanced at closing at significantly lower interest rates. US Can also launched a tender offer for its outstanding senior secured and subordinated notes, with the tender price determined by KDP Investment Advisors.

Key Takeaways:

  • Ball Corp. has secured $500 million in senior secured financing from JPMorgan and Deutsche Bank to support its acquisition of US Can Corp.'s US and Argentinean operations.
  • The acquisition terms include the issuance of 1.1 million shares of Ball's stock and the assumption of US Can's debt, which will be refinanced at closing at significantly lower interest rates.
  • US Can launched a tender offer for its $125 million of outstanding 10.875% senior secured notes due 2010 and its $171 million of outstanding 12.375% senior subordinated notes due 2010.
  • The tender price for the 10.875% notes is 50 basis points over the yield of 3.625% Treasury notes due June 30, 2007, and for the 12.375% notes is 106.74.
  • The tender price includes a consent payment of $30 per bond, payable to holders who tender by March 2, and the expiration of the offers is set for March 22.
  • Raymond J. Seabrook, Ball's senior vice president and CFO, stated that the refinancing will consist of the issue by Ball of a new series of senior notes and an increase in bank debt under the new facilities that were put in place in the fourth quarter of 2005.

Statistics:

  • $500 million: Amount of senior secured financing committed by JPMorgan and Deutsche Bank for the acquisition.
  • 1.1 million: Number of shares of Ball's stock to be issued in the acquisition.
  • $550 million: Amount of existing US Can debt to be refinanced at closing at significantly lower interest rates.
  • $125 million: Outstanding principal amount of 10.875% senior secured notes due 2010.
  • $171 million: Outstanding principal amount of 12.375% senior subordinated notes due 2010.
  • 50 basis points: Tender price premium for 10.875% senior secured notes.
  • 3.625%: Yield of Treasury notes due June 30, 2007.
  • 106.74: Tender price for 12.375% senior subordinated notes.
  • 106.188: Current callable price of 12.375% senior subordinated notes.
  • $30: Consent payment per bond for holders who tender by March 2.

Sources:

  • High Yield Report and SourceMedia, Inc.
  • http://www.highyieldreport.com
  • http://www.sourcemedia.com

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