Berry Global Subsidiary to Issue New Senior Secured Notes

Berry Global Group's subsidiary plans to issue new senior secured notes to repay debt and strengthen its balance sheet. The company is also making a tender offer to purchase up to $500 million of its outstanding notes due 2026.

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Bijay Laxmi
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Berry Global Subsidiary to Issue New Senior Secured Notes

Berry Global Subsidiary to Issue New Senior Secured Notes

Berry Global Group, Inc. (NYSE: BERY), a leading global supplier of innovative packaging and engineered products, announced on May 13, 2024, that its wholly-owned subsidiary, Berry Global, Inc. (the "Issuer"), plans to issue a new series of first priority senior secured notes (the "Notes"). The net proceeds from the offering are intended to be used for debt repayment and balance sheet strengthening, as well as to repurchase existing notes, pay fees, and fund general corporate purposes.

Why this matters: This move by Berry Global Group's subsidiary reflects the company's efforts to proactively manage its balance sheet and capital structure, which can have a ripple effect on the entire industry and influence investor confidence. Effective debt management can also impact the company's ability to invest in sustainable initiatives and drive long-term growth.

In conjunction with the new Notes offering, Berry Global, Inc. has also commenced a tender offer to purchase for cash up to $500,000,000 aggregate principal amount (the "Maximum Tender Amount") of its outstanding 4.875% First Priority Senior Secured Notes due 2026. The tender offer is being made pursuant to the terms and conditions set forth in the Offer to Purchase dated May 13, 2024.

The tender offer will expire at 5:00 p.m. New York City time on June 11, 2024, unless extended or earlier terminated by the Company. To be eligible to receive the Early Tender Consideration, which includes an early tender premium of $30 per $1,000 principal amount of Notes, holders must validly tender their Notes at or prior to 5:00 p.m. New York City time on May 24, 2024. "Holders of the Notes are urged to read carefully the Offer to Purchase before making any decision with respect to the Tender Offer," the Company stated.

Notes validly tendered at or prior to the Early Tender Time will be accepted for purchase in priority to other Notes validly tendered after the Early Tender Time. If the Maximum Tender Amount is reached as a result of tenders made at or prior to the Early Tender Time, Notes tendered after the Early Tender Time will not be accepted for purchase unless the Maximum Tender Amount is increased by the Company in its sole discretion, subject to applicable law.

The consideration offered per $1,000 principal amount of Notes validly tendered and accepted for purchase will be determined by reference to a fixed spread specified for the Notes plus the yield to maturity based on the bid side price of the U.S. Treasury Reference Security, calculated as of 10:00 a.m. New York City time on May 28, 2024. In addition to the tender consideration, holders whose Notes are purchased will also receive accrued and unpaid interest from the last interest payment date up to, but not including, the applicable settlement date.

Payment for the Notes validly tendered and accepted for purchase will be made on the Final Settlement Date, anticipated to be June 13, 2024, subject to all conditions to the tender offer having been satisfied or waived. The Company reserves the right, in its sole discretion, to pay for Notes validly tendered at or prior to the Early Tender Time on an Early Settlement Date, anticipated to be May 29, 2024. Notes tendered may be withdrawn at any time prior to 5:00 p.m. New York City time on May 24, 2024, unless extended or the tender offer is earlier terminated.

Berry Global Group, Inc. is a leading global supplier of innovative packaging and engineered products. With over 40,000 employees across more than 250 locations worldwide, the company partners with customers to develop, design, and manufacture innovative products with an eye toward the circular economy. The new Notes offering and concurrent tender offer represent Berry Global's ongoing efforts to proactively manage its balance sheet and capital structure.

Key Takeaways

  • Berry Global to issue new senior secured notes to repay debt and strengthen balance sheet.
  • Tender offer to purchase up to $500M of outstanding 4.875% notes due 2026.
  • Early tender deadline: May 24, 2024; tender offer expires June 11, 2024.
  • Consideration includes tender premium of $30 per $1,000 principal amount of notes.
  • Proceeds to be used for debt repayment, balance sheet strengthening, and general corporate purposes.