R.R. Donnelley has consents for 2023 notes, only 2029 debentures left

Chicago, Feb. 7 – R.R. Donnelley & Sons Co. announced the expiration of the consent solicitation for its 2023 notes by the extended deadline of 5 p.m. ET on Feb. 4, according to a press release on Monday morning.

The company received consents from noteholders representing 71.65% of the notes, or $53,713,000, of the $74,970,000 outstanding 6½% notes due 2023 (Cusip: 257867BA8).

The company is extending the expiration date for the one remaining series from the solicitation which started on Jan. 20: the $103,658,000 outstanding 6 5/8% debentures due 2029 (Cusip: 257867AG6).

The new expiration time is 5 p.m. ET on Feb. 11.

Background

The consent solicitation relates to the upcoming buyout of the company by Chatham Asset Management LLC.

By the 5 p.m. ET expiration time on Feb. 1, Donnelley received consents for

• $61,738,000 outstanding 6% notes due 2024 (Cusip: 257867BB6) with noteholders representing $50,453,000, or 81.72%, of the notes delivering consents;

• $450 million outstanding 6 1/8% senior secured notes due 2026 (Cusips: 257867BF7, U25783AF5) with noteholders representing $351,414,000, or 78.09%, of the notes delivering consents; and

• $54,496,000 outstanding 8.82% debentures due 2031 (Cusip: 257867AF8) with noteholders representing $34,142,000, or 62.65%, of the notes delivering consents.

The expiration time was 5 p.m. ET on Feb. 1.

Previously concluded

For just two series, the expiration time was 5 p.m. ET on Jan. 27.

Accordingly, the company had already received consents from holders representing $232,335,000, or 94.85%, of the $224,949,000 outstanding 8¼% notes due 2027 (Cusip: 257867BE0) and $317,595,000, or 99.81%, of the 8½% notes due 2029 (Cusips: 257867BC4, U25783AE8).

Of the debt securities, Chatham Delta Parent, Inc. owns more than half of the senior secured notes due 2026, the notes due 2027 and the notes due 2029 (all three solicitations have now ended). Chatham agreed to consent to the changes, providing the required consents for the proposed modifications.

Solicitations

As previously reported, Donnelley was soliciting consents for the 2026 notes and the unsecured notes to avoid a change-of-control offer. In the indentures the definition of “change of control” would be amended to include a carve-out for certain permitted holders.

Additionally, the 2026 notes indentures will be modified to expressly permit the merger and the other transactions contemplated by the merger agreement, reduce the period during which an event of default may be declared in some circumstances in connection with the merger transactions to one year from two years and modify the company’s obligations with respect to conducting quarterly conference calls.

Also, for the unsecured notes and the debentures, the indentures would be amended to align the reporting covenant with the 2026 notes indenture except there would be no obligation to conduct quarterly conference calls.

Details

For all of the securities not majority-owned by Chatham, a consent consideration of $1.25 per $1,000 principal amount will be paid to consenting holders.

No consent fee will be paid for the other three securities as Chatham owns more than 50% of them.

The consent consideration will be paid promptly after all conditions have been satisfied or waived, including the consummation of the merger.

The merger is currently expected to close during the first quarter of 2022.

The effectiveness of the proposed amendments is not a condition for the merger, but the merger is a condition for the effectiveness of the supplemental indentures.

The record time was 5 p.m. ET on Jan. 18.

Jefferies LLC is the solicitation agent (212 284-3426).

Ipreo LLC is the information agent and tabulation agent (888 493-9546, 212 849-3880, ipreo-consentSolicitation@ihsmarkit.com).

R.R. Donnelley is a Chicago-based provider of multichannel business communications services and marketing solutions.

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