Mallinckrodt begins private exchange for $495 million 4 7/8% notes

By Sarah Lizee

Olympia, Wash., April 7 – Mallinckrodt plc and subsidiaries Mallinckrodt International Finance SA and Mallinckrodt CB LLC entered into a private exchange agreement on Tuesday to exchange their $495 million 4 7/8% senior notes due 2020 for new 10% first-lien senior secured notes due 2025 at a rate of $1,000 of new notes for every $1,000 of existing notes exchanged, according to an 8-K filing with the Securities and Exchange Commission.

The exchange agreement was entered into with exchanging holders Aurelius Capital Master, Ltd., Franklin Advisers, Inc., Capital Research and Management Co. and private funds managed by Columbus Hill Capital Management, LP.

The issuers expected to complete the exchange on Tuesday.

The issuers may redeem some or all of the new notes prior to April 15, 2022 by paying a make-whole premium. After that, the notes will be redeemable at specified redemption prices.

In addition, prior to April 15, 2022, the issuers may redeem up to 40% of the new notes with the net proceeds of certain equity offerings.

The notes will be putable at 101 plus accrued interest as a result of certain change-of-control events and at par plus accrued interest in the event of certain net asset sales.

The issuers and exchanging holders agreed to terminate the previous support and exchange agreement dated Feb. 25.

The issuers expect to use cash on hand to repay the outstanding existing notes that mature on April 15.

Mallinckrodt is a Staines-Upon-Thames, U.K.-based developer, manufacturer and marketer of specialty pharmaceutical products and diagnostic imaging agents.

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