Silgan Holdings Inc. (SLGN), a supplier of consumer goods packaging products, announced the expansion of its senior secured credit, and reduced its adjusted net income per diluted share estimate for the full year of fiscal 2010 by $0.07 to $2.10 – $2.20. Deutsche Bank Securities Inc. and Banc of America Securities LLC were the book runners for the facility, which after this syndication stands to be worth $1.4 billion.
The new credit facility provides the company with US $400 million of US A term loans, €125 million of Euro A term loans, Cdn $81 million of Canadian A term loans and a US $800 million multicurrency revolving loan facility.
The new term loans refinance the term loans under the prior credit facility. The new term loans mature on July 7, 2016 while the revolving loan facility matures on July 7, 2015. The new credit facility provides an incremental uncommitted multicurrency loan provision of up to an additional $450 million.
The company intends to use the excess proceeds from the new term loans for general corporate purposes including acquisitions, stock repurchases and refinancing of other debt. Besides, Silgan is considering the redemption of its 6.75% senior subordinated notes due 2013 using a portion of the proceeds.
The long-term debt of the company as of March 31, 2010 was $863 million, down from $1,019 million as of March 31, 2009, but increased from $799 million as of December 31, 2009. Though the new facility is expected to enhance the amount of borrowings available to the company, the indebtedness makes Silgan vulnerable to higher interest risks. Incurring a loss by an early extinguishment of debt, the company will be charged approximately 4 cents per share.
The cash and cash equivalents were $99 million at the end of the first quarter ended March 31, 2010 compared with $201 million in the corresponding period of the earlier year and $305 million at the end of the prior quarter. The operating cash flow of the company was $204 million compared with leverage-free cash flow of $141 million as of March 31, 2010.
Stamford, Connecticut-based Silgan, has 66 manufacturing facilities in North and South America, Europe and Asia. Silgan is also a supplier of metal, composite and plastic vacuum closures for food and beverage products. The company’s products include some of the world’s known branded consumer products – Campbell’s Soup, Del Monte Fruits and Vegetables, Listerine and Friskies Pet Food.
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