Institutional players offered more than $1billion for Silgan Holdings' $300 million "B" loan before the bank meeting was even held last Thursday. Deutsche Bank, Bank of America, Morgan Stanley and Citibank all have roles on the $800 million bank debt, which also comprises a $400 million, six-year revolver and a $100 million "A" term loan, said a banker. Silgan is looking to refinance to take advantage of the current investor enthusiasm for the paper, said Harley Rankin Jr., executive v.p. and cfo of Silgan. The $300 million "B" is still being shopped and the LIBOR plus 2 1/2% pricing is unchanged, the banker noted. The pro rata is priced at LIBOR plus 2%.
Deutsche Bank is administration agent and B of A is the syndication agent. Morgan Stanley was lead manager on an accompanying $200 million bond issue, with the other three banks bookrunners. The bonds yield 8.119%, 0.9% lower than the company's existing notes, said Rankin.
Silgan makes metal, plastic and paperboard containers. Moody's Investors Service assigned a Ba2 rating to the company, citing the solid financial condition as evidenced by the strength of its EBIT margins. Despite operating in mature industries, it is also Moody's opinion that Silgan has been able to grow earnings through successful new product introductions and judicious capital investments.