Crown Holdings Offers Senior Notes - Analyst Blog

Crown European Holdings S.A., a subsidiary of Crown Holdings, Inc. CCK announced its plan to offer €500 million (around $680 million) worth of senior unsecured notes scheduled to mature in 2022 depending on market conditions.

The New Notes to be issued through private placement would be unconditionally guaranteed by Crown Holdings. These Notes would be resold by initial purchasers to qualified institutional buyers and to persons outside the U.S. under Rule 144A and Regulation S, respectively, under the Securities Act.

The proceeds from the issuance of Senior Notes will be deployed to retire €500 million senior unsecured notes due 2018. Crown Holdings will also use the proceeds to pay fees and expenses related to the offering of New Notes and to pay redemption and tender premiums associated with repayment of the 2018 Notes.

In addition, Crown Holdings has launched a tender offer for the outstanding Notes due 2018. The offer will expire on Jul 22, 2014.

The purchase price to be paid for each €1,000 principal amount of 2018 Notes will be an amount of €1,022.21 in cash. Holders of 2018 Notes validly tendered and accepted for payment on Jul 7, 2014 will receive €1,042.21. Holders whose 2018 Notes are accepted in the offer will also receive accrued and unpaid interest subject to terms and conditions.

Concurrently, with the commencement of the offer, Crown Holdings declared its intention to issue a conditional notice of redemption to redeem any 2018 Notes. The redemption price is equal to the principal amount of 2018 Notes redeemed plus a make-whole premium as of and accrued and unpaid interest to the redemption date.  

The redemption notice is conditioned upon the consummation of the offering of the New Notes if the terms are suitable to the company and with gross proceeds to Crown European Holdings of at least €500 million.

Crown Holdings reported a 14% year-over-year rise in its first-quarter 2014 adjusted earnings to 57 cents per share, surpassing the Zacks Consensus Estimate of 51 cents.

For the second quarter of 2014, it 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 $3.35.

Philadelphia-based Crown 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 better-ranked players in the same industry include Graphic Packaging Holding Company GPK, Sonoco Products Co. SON and AO Smith Corp. AOS, all of which carry a Zacks Rank #2 (Buy).

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