Silgan Downgraded by Moody's - Analyst Blog
May 16 2011 - 1:34PM
Zacks
Silgan Holdings Inc. (SLGN) has been recently
downgraded to Stable from a positive outlook by Moody's Investors
Service.
It is worthy of note that the company has been downgraded when
it was planning to buy Graham Packaging Company
Inc. (GRM) in a cash-and-stock deal worth $1.28
billion.
According to Moody’s, it provided a stable outlook contemplating
the risks involved in the acquisition and integration of Graham;
Silgan’s attempts to pay down its debt using free cash flows, thus
abstaining from further significant acquisitions and trying to
preserve liquidity.
Moody’s has assigned a "Ba2" corporate family and probability of
default ratings along with a "Ba1" rating to a $2.3 billion term
loan, a new $4 billion credit facility and other debt.
Sligan recently reported its fiscal first quarter results
increasing its long-term debt to $1443 million as of March 31, 2011
from $863 million as of March 31, 2010. As a result, Sligan’s
debt-to-capitalization ratio further deteriorated to 71.1% from 62%
as of December 31, 2010 and 54% as of December 31, 2009.
Silgan is a leading manufacturer of consumer goods packaging
products operating 66 manufacturing facilities in North and South
America, Europe and Asia. In North America, Silgan is the largest
supplier of metal containers for food products and a leading
supplier of plastic containers for personal care products.
A leader in supplying metal, composite and plastic vacuum
closures for food and beverage products worldwide, Sligan competes
with the likes of Ball Corporation (BLL) and
Crown Holdings Inc. (CCK). We currently have a
Zacks #2 Rank (short-term Buy recommendation) on the stock.
BALL CORP (BLL): Free Stock Analysis Report
CROWN HLDGS INC (CCK): Free Stock Analysis Report
GRAHAM PACKAGNG (GRM): Free Stock Analysis Report
SILGAN HOLDINGS (SLGN): Free Stock Analysis Report
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