(Source: Business Wire)
Silgan Holdings Inc. (Nasdaq:SLGN), a leading supplier of consumer goods packaging products, today announced that it has entered into an agreement to sell $250 million aggregate principal amount of 7.25% senior unsecured notes maturing in 2016 pursuant to its previously announced offering. The offering was increased to $250 million from a previously announced offering size of $200 million. The notes will be issued at a price equal to 97.28 percent of their face value. The net proceeds from the offering will be utilized by the Company to prepay the 2009 term loan installment payments and most of the 2010 term loan installment payments due under its senior secured credit facility.
As a result of the issuance of the 7.25% senior notes and the use of the net proceeds therefrom to prepay term loans, the Company expects to incur incremental second quarter 2009 interest and other debt expense of approximately $2.7 million, or $0.04 per diluted share, and incremental full year 2009 interest and other debt expense of approximately $9.9 million, or $0.16 per diluted share. Accordingly, the Company is revising its estimates of adjusted net income per diluted share for the second quarter of 2009 to a range of $0.72 to $0.82 and for the full year 2009 to a range of $3.60 to $3.80. A reconciliation of net income per diluted share to "adjusted net income per diluted share," a Non-GAAP financial measure used by the Company, which adjusts net income per diluted share for certain items, can be found in Table A in the back of this press release.
"Over the last eighteen months, we have worked to reduce our reliance on short term bank borrowings," said Robert B. Lewis, the Company's Chief Financial Officer. "In a continuation of that effort, we took advantage of the relative strength in the senior unsecured bond market. While the transaction is slightly dilutive to earnings, we believe it effectively eliminates refinancing risk associated with our current senior secured credit facility and anticipate being able to fund our future debt amortization payments and our seasonal working capital requirements with free cash flow. As a result, this capital structure better positions us to pursue our acquisition growth strategy," continued Mr. Lewis. "We are pleased with the strong support from the debt markets and believe we priced at a relatively attractive fixed rate, particularly in light of current economic conditions," concluded Mr. Lewis.
