Mallinckrodt offers to exchange five series of notes for new notes

By Sarah Lizee

Olympia, Wash., Nov. 5 – Mallinckrodt plc wholly owned subsidiaries Mallinckrodt International Finance SA and Mallinckrodt CB launched private offers to exchange several series of their notes for up to $355 million of new notes, according to a press release.

The companies are offering to exchange any and all of the 4 7/8% senior notes due 2020 for new 10% second-lien senior secured notes due 2025; and the 5¾% senior notes due 2022, 4¾% senior notes due 2023, 5 5/8% senior notes due 2023 and 5½% senior notes due 2025 for up to $355 million of the new notes.

In connection with the exchange offers, the issuers are also soliciting consents from holders of each series of the existing notes, other than the 4¾% notes due 2023, to amend the indentures governing each series to eliminate substantially all of the restrictive covenants, modify or eliminate some other provisions and waive some defaults and events of default, if any.

The consent of the holders of a majority of the aggregate principal amount of the existing notes outstanding of each series will be required in order to effectuate the proposed amendments.

The exchange considerations for every $1,000 principal amount of existing notes are as follows:

• $800 for the 4 7/8% senior notes due 2020;

• $425 for the 5¾% senior notes due 2022;

• $320 for the 4¾% senior notes due 2023;

• $375 for the 5 5/8% senior notes due 2023; and

• $375 for the 5½% senior notes due 2025.

In addition to the exchange consideration, holders who tender their notes for exchange by the early exchange time, 5 p.m. ET on Nov. 19, will also receive an early participation premium of $50 per $1,000 principal amount.

The offers will expire at 11:59 p.m. ET on Dec. 4.

The settlement date will occur promptly after the expiration time.

Eligible holders of existing notes may deliver their consent to the proposed amendments only by tendering existing notes. Eligible Holders may not deliver a consent without tendering existing notes.

Tenders may be validly withdrawn at any time on or prior the early exchange time, but not after.

Consents may only be revoked by validly withdrawing the tendered existing notes prior to the withdrawal deadline.

An eligible holder must tender all of its existing notes in the exchange offers in order to participate in any exchange offer.

In the event that the amount of new notes issuable in respect of the existing non-2020 notes would exceed the cap, $355 million, but would not exceed the cap if no existing 4¾% notes due 2023 were accepted, the issuers will accept existing 4¾% notes due 2023 that have been tendered on a pro rata basis.

In the event that the amount of new notes issuable in respect of the existing non-2020 notes would exceed the cap regardless of whether or not any existing 4¾% notes due 2023 were accepted, the issuers will not accept any existing 4¾% notes due 2023 and will accept all other existing non-2020 notes that have been tendered on a pro rata basis.

In addition to the exchange offers, Deerfield Partners, LP, Deerfield Special Situations Fund, LP and Deerfield Private Design Fund IV, LP as exchanging holders, collectively holding about $500 million, or 16.9%, of the existing notes, entered into an exchange agreement with the issuers.

The Deerfield exchanging holders agreed to exchange with the issuers on the settlement date, separate from the exchange offers, their existing notes for about $227 million of new notes.

D.F. King Co., Inc. (866 356-7814 toll free, 212 269-5550 for bankers and brokers or mnk@dfking.com) is the exchange agent and information agent.

Mallinckrodt is a Dublin-based pharmaceutical company with U.S. headquarters in St. Louis.

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