Research: Rating Action: Moody’s assigns Baa3 to Ball Corp’s credit facility and affirms Ba1 CFR; Outlook is stable

Approximately $3.1 billion of new debt rated

New York, June 28, 2022 — Moody’s Investors Service (“Moody’s”) affirmed Ball Corporation’s (“Ball”) Ba1 Corporate Family Rating (CFR), Ba1-PD Probability of Default Rating (PDR), and assigned a Baa3 rating to the company’s new $1.75 billion senior secured first lien bank credit facility and $1.35 billion senior secured term loan A. The new term loan A proceeds will be used to refinance the outstanding term loan A and repay the outstanding revolver balance. The new senior secured first lien bank credit facility proceeds are intended to be utilized for ongoing working capital, acquisitions, share repurchases, and general corporate purposes. The ratings on the existing senior secured first lien bank credit facility and term loan A will be withdrawn upon closing of this refinancing transaction. The Ba1 rating on the company’s senior unsecured notes were also affirmed and the Speculative Grade Liquidity rating (SGL) was maintained at SGL-2. The outlook is stable.

Ball’s Ba1 CFR is supported by Moody’s expectation that the company’s five-year growth capital expenditure program to expand can manufacturing capacity will moderate by the end of 2023, while EBITDA and cash flow benefit. As a result, Moody’s expects free cash flow, after dividends, as a percentage of debt to grow to in excess of 6% by the end of 2023.

“Ball Corp’s successful expansion of aluminum can manufacturing capacity and strong aerospace backlog are expected to improve EBITDA, cash flow, and leverage leverage over the medium term, while shareholder returns are executed in balance with the company’s authorized leverage target,” said Scott Manduca, Vice President at Moody’s.


..Issuer: Ball Corporation

…. Corporate Family Rating, Affirmed Ba1

…. Probability of Default Rating, Affirmed Ba1-PD

….Senior Secured 1st Lien Bank Credit Facility, Affirmed Baa3 to (LGD3) from (LGD2)

….Senior Unsecured Regular Bond/Debenture, Affirmed Ba1 (LGD4)


..Issuer: Ball Corporation

….Senior Secured 1st Lien Term Loan, Assigned Baa3 (LGD3)

….Senior Secured 1st Lien Revolving Credit Facility, Assigned Baa3 (LGD3)

….Senior Secured 1st Lien Multicurrency Revolving Credit Facility, Assigned Baa3 (LGD3)

Outlook Actions:

..Issuer: Ball Corporation

….Outlook, Remains Stable


The Ba1 CFR reflects Ball’s leading global market position as the top manufacturer of aluminum cans and bottles to the consumer packaging industry. Moody’s expects the company’s last twelve months ended March 31, 2022 debt-to-EBITDA of 4.4x (Moody’s adjusted) to approach 4.0x by the end of 2023 and free cash flow (after dividends) to be about $700 million, or 6.4% of total debt. Drivers of liquidity and leverage improvements stem from the realization of EBITDA and cash flow benefits from a five-year growth capex program to expand aluminum can manufacturing capacity. Ball has committed to maintaining its net-debt/EBITDA target (based on the company’s calculation) in the 3-3.5x area. At the end of 2023, Moody’s expects Ball Corp’s calculated net-debt to EBITDA to reside in the middle to top end of this range.

The rating is constrained by Ball’s shareholder friendly financial strategy, consisting of increased dividends and consistent share repurchase activity, which we expect to be in balance with the company’s stated net leverage target. The company has publicly announced that they will spend up to $1.75 billion in share repurchases and dividends during fiscal 2022, most of which may be executed in the back half of the year as necessary funding of working capital needs traditionally occur in the first half of the year. Ball also endures customer concentration, with its top three customers making up 35% of annual net sales but does show some business diversification with an Aerospace division accounting for about 14% of annual sales.

Ball Corp’s SGL-2 Speculative Grade Liquidity Rating reflects our expectation the company will maintain good liquidity. We expect Ball to generate enough cash flow to fund all normal cash needs and have available liquidity under committed credit facilities. Committed credit facilities include a $1.25 billion revolver and $500 million multi-currency revolver, both of which mature in 2027. The company also has access to $1.25 billion under accounts receivable securitization programs that are generally renewed every two to three years. Upcoming maturities include $1 billion in guaranteed senior unsecured notes and EUR700 million guaranteed euro notes maturing in November and December 2023, respectively.

The Baa3 ratings on the senior secured first lien revolving bank credit facility and senior secured term loan A are one notch higher than Ball Corporation’s Ba1 CFR reflecting the debt instruments’ priority position in the capital structure and benefits from loss absorption provided by $7.1 billion of unsecured debt.

The stable outlook reflects double digit revenue growth stemming from strong demand and benefits from Ball Corp’s growth capital expenditure program. Debt-to-EBITDA (inclusive of Moody’s adjustments) is expected to decline to near 4.0x by the end of 2023.


A ratings upgrade would require less aggressive financial policies, liquidity improvement, and a migration to an investment grade capital structure. Specifically, the ratings could be upgraded if adjusted total debt-to-EBITDA is below 3.5x, free cash flow-to-debt above 10%, and EBITDA-to-interest greater than 6.0x.

A ratings downgrade may occur if there is a deterioration in the company’s business profile, credit metrics, or liquidity. Specifically, if adjusted total debt-to-EBITDA is above 4.25x without a reasonable path to fall below this threshold, free cash flow-to-debt falls below 7%, and EBITDA-to-interest is below 5.5x.

As proposed, the new credit facilities are expected to provide covenant flexibility that if utilized could negatively impact creditors. Notable terms include the following:

Incremental debt capacity up to the greater of $300 million, plus unlimited amounts subject to 2.0x First Lien Net Leverage Ratio (if pari passu secured). No portion of the incremental may be incurred with an earlier maturity than the initial term loans.

The preliminary term sheet specifies a net leverage ratio financial covenant limit of 5.0x for any test period ending on or prior to June 30, 2025. This covenant limit ratchets down to 4.5x when the test period ends on or is after September 30, 2025. and is relaxed 0.50x for four quarters in connection with certain permitted acquisitions.

There are no express “blocker” provisions which prohibit the transfer of specified assets to unrestricted subsidiaries; Such transfers are permitted subject to carve-out capacity and other conditions.

Non-wholly-owned subsidiaries are not required to provide guarantees; dividends or transfers resulting in partial ownership of subsidiary guarantors could jeopardize guarantees, with no explicit protective provisions limiting such guarantee releases

There are no express protective provisions prohibiting an up-tiering transaction.

The above are proposed terms and the final terms of the credit agreement may be materially different.

Westminster, Colorado based Ball Corporation is a manufacturer of metal packaging, primarily for beverages, and a supplier of aerospace and other technologies and services to government and commercial customers. Revenue for the twelve months ended March 31, 2022 totaled $14.4 billion.

The principal methodology used in these ratings was Packaging Manufacturers: Metal, Glass and Plastic Containers published in December 2021 and available at Alternatively, please see the Rating Methodologies page on for a copy of this methodology.


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Scott Manduca
Vice President – Senior Analyst
Corporate Finance Group
Moody’s Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Gretchen French
Associate Managing Director
Corporate Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

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Moody’s Investors Service, Inc.
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JOURNALISTS: 1 212 553 0376
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