Ardagh's bondholders are banking on a leverage-reducing initial public offering of shares to sustain a rally after the European glassware maker completes a $1.7 billion (€1.2 billion) debt-funded acquisition in the US.

Ardagh has outperformed its peers in the bond market since the Luxembourg-based company signalled in November it would go ahead with the debut share sale it postponed 15 months earlier.

Relative yields on Ardagh's notes narrowed an average 139 basis points since chairman Paul Coulson said the company was filing for an IPO, compared with the 93 basis-point decline in Bank of America Merrill Lynch's US High Yield Index.

Ardagh said its purchase of the American business of Compagnie de Saint-Gobain's Verallia unit will make it the US's largest producer of glass containers.

The company, with its roots in an Irish bottle maker started in 1932 and which supplies Coca-Cola, Anheuser-Busch and L'Oreal, has raised about $3.2 billion in bond markets in the past two years, according to data compiled by Bloomberg.

"Ardagh has been on an acquisition binge in the past couple of years, but I think Verallia will be their last major deal before they move their focus to getting an IPO done," said Ben Pakenham, a London-based fund manager at Aberdeen Asset Management, which oversees $314 billion.

"The acquisition will pave the way for Ardagh's next major strategic move, to do an IPO in the US."

Company executives told debt investors they'll use the proceeds of the IPO to lower debt and help fund more purchases, the person said.