The proceeds from the additional notes will be used to fund the announced acquisition of Anchor Glass Group (unrated), a US-based producer of glass containers for the food and beverage industry for USD880 million plus transaction related fees and expenses. The enterprise value represents around 6x Anchor's 2011 EBITDA and is in line with our expectation for transactions in this industry. The acquisition is subject to customary closing conditions including approval from regulatory authorities, which is expected to be obtained by Q3 2012.

RATINGS RATIONALE

The outlook change to negative from stable on the group's ratings is a reflection of our assessment that the proposed acquisition is overall credit negative. This assessment is substantiated by the expected increase in net debt by about USD920 million as a result of the transaction, underlining management's aggressive financial policy dedicated to growing the group. At the same time, Ardagh's existing business lacks expected improvements in profitability as the sluggish macroeconomic situation in Europe results in continued volume weakness, in particular affecting the metal side of Ardagh's business. Demand for cans used to package products that are more prone to cyclicality, such as aerosols and paints & coatings, is weak and, coupled with charges related to a restructuring of the group's metal operations, will result in lower than expected profitability for 2012. Moody's therefore cautions that, absent improvements in the group's existing operations and/or potential benefits from a targeted IPO, it might be challenging for Ardagh to bring down its leverage to levels more commensurate with the B2 rating. As laid out in prior publications, Moody's would expect leverage in terms of Debt/EBITDA of around 6x to maintain the current rating, compared to pro forma leverage (including the Anchor transaction) of above 6.5 times as of March 2012.

In terms of business profile, we view the acquisition of Anchor as positive, considering that it allows Ardagh to obtain a material share of the US glass container market with estimated 25% market share (including its existing Leone business) and contributing to increased scale and better diversification of the business. Anchor will add approximately 20% to Ardagh's existing group sales and about 40% to its existing glass operations. Furthermore, the transaction will be margin accretive, considering that Anchor shows higher profitability margins than Ardagh's group margin, given the lower overall margin of Ardagh's metal business. However, we note that Anchor's EBITDA margin remains below that of Ardagh's European glass operations. Synergy potential is only modest in our view, given the negligible direct overlap and limited ability to integrate the two businesses on an operational level.

More positively, the affirmation of the group's B2 corporate family rating reflects (i) Ardagh's solid scale with sales in excess of EUR4 billion pro forma for the acquisition of Anchor and good market positions of the combined group in the rather low-cyclical food and beverage industry, where Ardagh generates the vast majority of sales; (ii) an improving geographic spread with the focus of operations still on the European market but with activities also to include an increased presence in North America; as well as (iii) a balanced product offering of glass and metal containers.

These positive rating drivers are balanced by (i) high leverage following a string of debt financed acquisitions over the past 2 years, resulting in pro forma leverage point in time of 6.7x; (ii) the exposure to volatile raw material prices, which need to be passed on to customers in a timely fashion to preserve solid profitability levels as well as (iii) an aggressive financial policy as evidenced by full debt financing of recent acquisitions as well as a debt financed shareholder distribution in 2011.

The ratings could be downgraded should Ardagh (i) not be able to improve profitability, caused for instance by continued volume weakness, increasing competition or the inability to manage volatile raw material costs; (ii) start generating negative free cash flow or; (iii) should Debt/EBITDA remain sustainably above 6 times and interest coverage in terms of (EBITDA-Capex)/Interest decline towards 1x.

Although rather unlikely at this juncture, the ratings could be upgraded should Ardagh be able to reduce leverage in terms of Debt/EBITDA towards 5 times and keep interest coverage in terms of (EBITDA-Capex)/Interest around 1.5x by improving its operating profitability and continued free cash flow generation.

The instrument ratings for the additional notes are based on indicative terms and conditions received so far according to which (i) the additional Senior Secured Notes benefit from the same guarantors and security package as Ardagh's existing Senior Secured Notes, and (ii) the additional senior unsecured notes benefit from the same guarantee package as Ardagh's existing senior unsecured notes. Ardagh's existing senior secured notes are supported by senior guarantees of subsidiaries representing at least 85% of consolidated assets and EBITDA and security interests, which we understand comprise the clear majority of the guarantors' assets. While Ardagh's senior unsecured debt is supported by guarantees from the same entities that guarantee the senior secured debt, it does not benefit from any tangible collateral.

The two notch uplift of the secured notes compared to the corporate family rating is driven by limited priority debt sitting ahead of these notes, which in Moody's view should result in limited losses to be borne by the secured notes holders in a default scenario. Priority debt sitting ahead of the secured notes in Ardagh's capital structure relates to the group's EUR150 million asset-based lending facility that benefits from priority access to proceeds from certain collateral. We have ranked trade payables of the group in line with senior secured debt. The group's senior unsecured notes are rated two notches below the corporate family rating, reflecting the implemented effective subordination relative to a sizeable amount of senior secured debt that ranks ahead in the capital structure with a closer proximity to operating cash flows and assets.

Outlook Actions: ..Issuer: ARD Finance S.A.....Outlook, Changed To Negative From Stable

..Issuer: Ardagh Glass Finance plc

....Outlook, Changed To Negative From Stable

..Issuer: Ardagh Packaging Finance plc

....Outlook, Changed To Negative From Stable

..Issuer: Ardagh Packaging Group plc

....Outlook, Changed To Negative From Stable

The methodologies used in these ratings were Global Packaging Manufacturers: Metal, Glass, and Plastic Containers published in June 2009, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Ardagh Glass Group, registered in Luxembourg, is a leading supplier of glass and metal containers by volume focusing on the European food and beverage market with some operations also in North America and Australasia. The company generated pro forma sales of about EUR3.9 billion in the last twelve months ending March 2012.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

The ratings have been disclosed to the rated entities or their designated agent(s) and issued with no amendment resulting from that disclosure.

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Ardagh Packaging Group plc, has received a Rating Assessment Service within the last two years preceding the Credit Rating Action.

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Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

In addition to the information provided below please find on the ratings tab of the issuer page at www.moodys.com, for each of the ratings covered, Moody's disclosures on the lead rating analyst and the Moody's legal entity that has issued each of the ratings.

Anke RindermannAsst Vice President - Analyst Corporate Finance Group Moody'sDeutschland GmbH An der Welle 5 Frankfurt am Main 60322 Germany JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Matthias Hellstern Associate Managing Director Corporate Finance Group Releasing Office: Moody's Deutschland GmbH An der Welle 5 Frankfurt am Main 60322 Germany JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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