Moody's Places Crown Holdings (CCK) on Review for Downgrade Following EMPAQUE Acquisition News

Moody's Investors Service ("Moody's") placed the Ba1 corporate family, Ba1-PD probability of default and other instrument ratings of Crown Holdings (NYSE: CCK) under review for downgrade.

RATINGS RATIONALE

The review follows Crown's announcement that it entered into an agreement to acquire EMPAQUE, a leading Mexican manufacturer of aluminum cans and ends, bottle caps and glass bottles for the beverage industry, from Heineken N.V., in a cash transaction value at $1.225 billion. The acquisition, which is subject to customary closing conditions, including competition authority approval, is expected to close by year end 2014. Financing has been committed in support of the transaction from Citigroup Global Markets Inc.

EMPAQUE is based in Monterrey, Mexico and currently operates two beverage can plants, a plant that manufacturers beverage can ends and aluminum closures and bottle caps and a glass bottle plant and services facility. Projected 2014 sales and EBITDA are approximately $700 million and $150 million, respectively.

Moody's review will focus on the final capital structure, potential synergies, the integration plan, and the company's commitment to dedicating free cash flow to debt reduction.

Moody's placed the following ratings under review for downgrade:

Crown Holdings, Inc.

-Corporate family rating, Ba1

-Probability of default rating, Ba1-PD

Crown Americas, LLC

-$450 million US Revolving Credit Facility due December 2018, Baa2 (LGD 2)

-$800 million Term Loan A due December 2018, Baa2 (LGD 2)

-$362 million Farm Credit Term Loan due December 2019, Baa2 (LGD 2)

-$700 million 6.25% senior unsecured notes due February 2021, Ba2 (LGD 5)

-$1,000 million 4.50% senior unsecured notes due January 2023, Ba2 (LGD 5)

Crown Cork & Seal Company, Inc.

-$63.5 million 7.50% senior unsecured notes due December 2096, Ba3 (LGD 6)

-$350 million 7.375% senior unsecured notes due December 2026, Ba3 (LGD 6)

Crown European Holdings S.A.

-$700 million European revolving credit facility due December 2018, Baa2 (LGD 2)

-EUR700 million senior secured Term Loan A due December 2018, Baa2 (LGD 2)

-EUR650 million 4.0% senior unsecured notes due July 2022 Ba1 (LGD 3)

Crown Metal Packaging Canada L.P.

-$50 million Canadian revolving credit facility due December 2018, Baa2 (LGD 2)

The rating outlook is revised to rating under review for downgrade from stable.

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