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Reynolds seeks amendment to waive asset sale paydown, exchange loans
By Sara Rosenberg
New York, Feb. 18 – Reynolds Group Holdings Inc. held a call at 11 a.m. ET on Wednesday to launch an amendment to its senior secured term loan debt that would waive lenders’ rights to be prepaid with a pro rata portion of the proceeds from the sale of SIG Combibloc to Onex Corp., according to a market source.
The amendment would also waive pro rata prepayments from the sale of the company’s Evergreen and/or Closures businesses if definitive agreements are signed prior to March 31, 2016, the source said.
Consenting lenders will exchange their existing term loans due Dec. 1, 2018 into new term loans due Dec. 1, 2018 priced at Libor/Euribor plus 350 basis points with a 1% floor, versus current pricing of Libor plus 300 bps with a 1% Libor floor on the $2.19 billion U.S. term loan and Euribor plus 325 bps with a 1% floor on the €294 million euro term loan.
Also, the exchanging lenders will get 101 soft call protection for six months on their new term loans and a 25 bps amendment fee, the source said.
Once a 50% vote is achieved, the term loan exchange will be cancelled and all existing term loans will be amended to have the new pricing, call protection and waiver of asset sale prepayments.
Consents are due at 5 p.m. ET on Tuesday, the source added.
Credit Suisse Securities (USA) LLC is the lead bank on the amendment.
Instead of repaying the term loans, the company intends to buy back notes and has commenced cash tender offers for its 7 1/8% senior secured notes due 2019, 7 7/8% senior secured notes due 2019, 5¾% senior secured notes due 2020, 6 7/8% senior secured notes due 2021, 9% senior notes due 2019, 8½% senior notes due 2018, 9 7/8% senior notes due 2019, 8¼% senior notes due 2021 and 5 5/8% senior notes due 2016.
The tender offers will expire on March 16.
Reynolds is an Auckland, New Zealand-based manufacturer and supplier of consumer food and beverage packaging and storage products.
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