Following the announcement of an increase in the 4% senior
secured notes due 2022 to €650 million (around $885 million) by
Crown Holdings, Inc.
) on Jun 26, Moody's Investors Service - the rating unit of
) declared no immediate impact on Crown's Ba1 corporate family
rating, stable outlook, and other instrument ratings.
Shares of Crown Holdings rose around 1% since 26th June and closed
at $50 at the end of the trading session on Jul 1.
Crown Holdings had increased the size of its private placement from
€500 million to the current €650 million. The proceeds from the
notes, to be issued by Crown European Holdings S.A., a subsidiary
of Crown Holdings, will be used to pay fees and expenses related to
the offering of New Notes and to pay redemption and tender premiums
associated with the repayment of the 2018 Notes.
In addition, the proceeds will be deployed to retire €500 million
senior unsecured notes due 2018. Crown Holdings will also use it
for general corporate purposes including acquisitions, the
permanent repayment of term loan and the repurchase of outstanding
senior unsecured notes.
Moody's previously assigned a Ba1 rating to the senior unsecured
notes. Crown Holdings' Ba1 corporate family, Ba1-PD probability of
default ratings and other ratings remain unchanged. The Ba1
corporate family rating depicts the company's position in an
oligopolistic industry, comparatively stable end markets and
Moody's also stated that Crown Holdings is expected to benefit from
the recent Mivisa acquisition. The ratings outlook is stable which
hints that Crown will deploy sufficient free cash flow for debt
reduction to improve its credit metrics to a level commensurate
with the rating category over the intermediate term.
For the second quarter of 2014, Crown Holdings expects earnings per
share between 90 cents and $1.00, excluding any impact from the
Mivisa acquisition. Including the impact of Mivisa acquisition and
excluding the impact of share repurchases, full-year earnings per
share are expected to exceed the previous guidance of $3.15 to
Philadelphia-based Crown Holdings is a leading supplier of
packaging products to consumer marketing companies. The company
manufactures aluminum beverage cans, food cans, aerosol cans and
other packaging products.
Crown Holdings currently holds a Zacks Rank #2 (Buy). Some other
stocks worth considering in the same sector include
Graphic Packaging Holding Co.
). Both carry the same rank as Crown Holdings.
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