Ardagh hopes IPO will sustain rally

Ardagh Group’s bondholders are banking on a leverage-reducing initial public offering of shares to sustain a rally as the European glassware-maker completes a $1.7bn (€1.28bn) debt-funded acquisition in the US.

Ardagh has outperformed its peers in the bond market since the Luxembourg-based company signalled in November it would go ahead with the debut share sale it postponed 15 months earlier. Relative yields on Ardagh’s notes narrowed an average 139 basis points since chairman Paul Coulson said the company was filing for an IPO, compared with the 93 basis-point decline in Bank of America Merrill Lynch’s US High Yield Index.

Ardagh said its purchase of the American business of Cie. de Saint-Gobain’s Verallia unit will make it the US’s largest producer of glass containers. The company, with its roots in an Irish bottle maker started in 1932, and which supplies Coca-Cola, Anheuser-Busch InBev and L’Oreal, has raised about $3.2bn in bond markets in the past two years, according to data compiled by Bloomberg.