Amcor Announces Results of Consent Solicitations for Its Senior Secured Notes
Amcor plc, a global leader in packaging solutions, recently announced the expiration and results of its solicitation of consents (the “Consents Solicitations”) from registered holders of certain notes. This announcement comes after Amcor invited holders of its 1.50% First Priority Senior Secured Notes due 2027 (the “EUR Notes”), 1.65% First Priority Senior Secured Notes due 2027 (the “2027 USD Notes”), 5.50% First Priority Senior Secured Notes due 2028 (the “2028 USD Notes”), and 5.800% First Priority Senior Secured Notes due 2029 (the “2029 Notes”) to consent to proposed amendments (the “Proposed Amendments”) to the indentures governing these notes.
Terms of the Consent Solicitations
The Consent Solicitations began on March 2, 2023, and ended on March 23, 2023. The proposed amendments included, among other things, modifications to the definitions of certain terms and the elimination of certain restrictive covenants. In exchange for their consent, eligible Holders were offered various consideration, including cash payments and the opportunity to tender their notes for purchase at a price equal to 101.25% of the principal amount of the tendered notes, plus accrued and unpaid interest up to, but not including, the date of payment.
Results of the Consent Solicitations
Amcor announced that, as of the expiration of the Consent Solicitations, the following percentages of the outstanding principal amount of each series of notes had been validly consented to, and not revoked, by the required percentage of Holders:
- EUR Notes: 99.64%
- 2027 USD Notes: 99.98%
- 2028 USD Notes: 99.99%
- 2029 Notes: 99.98%
Based on these results, Amcor has entered into consent agreements with the Holders of the EUR Notes, 2027 USD Notes, 2028 USD Notes, and 2029 Notes to implement the Proposed Amendments. The effectiveness of the Proposed Amendments is subject to certain customary conditions.
Impact on Individual Investors
For individual investors holding these notes, the outcome of the Consent Solicitations may have several implications. First, the elimination of certain restrictive covenants may provide more flexibility for Amcor in its financial and business decisions. This could potentially lead to increased growth opportunities or operational efficiencies. However, it is important to note that these changes may also reduce certain protections for investors.
Second, investors who tendered their notes for purchase at the offered price will receive the cash payment and the tender amount of their notes will no longer be outstanding. This could impact their overall investment portfolio and potential future income from these notes. It is recommended that investors consult their financial advisors for personalized advice regarding their specific situation.
Impact on the World
From a broader perspective, the successful outcome of Amcor’s Consent Solicitations could signal a trend in the corporate debt market. The elimination of restrictive covenants and other amendments have become increasingly common in the market as companies seek to maintain financial flexibility in a rapidly changing business environment. This trend could potentially lead to more competitive financing terms and increased liquidity for issuers.
Conclusion
Amcor’s successful Consent Solicitations represent a significant step forward for the company, providing it with increased financial flexibility and potentially setting a trend in the corporate debt market. Individual investors holding these notes should carefully consider the implications of the Proposed Amendments and the tender offer. As always, it is recommended that investors consult their financial advisors for personalized advice regarding their specific situation.
The world of corporate finance continues to evolve, and Amcor’s Consent Solicitations serve as a reminder of the importance of staying informed and understanding the potential impact on one’s investment portfolio. As investors, we must remain vigilant and adapt to the ever-changing landscape in order to make informed decisions and maximize our potential returns.
