Ball Corporation Announces Early Results of Cash Tender Offers for Certain Outstanding Debt Securities
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Insights
The early results of Ball Corporation's Tender Offers for their 2025 and 2026 Senior Notes suggest a strategic move to restructure the company's debt profile. By repurchasing a significant portion of their outstanding notes, Ball is potentially reducing future interest expenses and extending the maturity of its debt obligations. The high participation rate, with over 80% of the 2025 Notes and approximately 66% of the 2026 Notes tendered, indicates investor confidence in the company's liquidity and its ability to pay the Total Consideration, which includes an Early Tender Premium.
This debt repurchase could improve Ball Corporation's balance sheet and potentially lead to a more favorable credit rating, which in turn may reduce the cost of borrowing in the future. However, this transaction will require a substantial outlay of cash, which is expected to be funded from the proceeds of the sale of Ball's aerospace business. Investors should monitor the company's cash flow statements in subsequent quarters to assess the impact of these transactions on liquidity.
The Tender Offers may reflect broader market trends where corporations are taking advantage of favorable conditions to refinance or retire existing debt. The timing of the Tender Offers and the use of proceeds from the sale of a major business segment to fund them could indicate Ball's strategic focus on core operations and a streamlined business model.
For the stock market, such financial maneuvers are often seen as a sign of proactive financial management. Provided the aerospace business sale does not detract from Ball's overall market position, this could be viewed positively by investors. It's important to consider the potential impact on Ball's operational capabilities without the aerospace segment and whether the company is repositioning for growth in its remaining divisions.
The conditions and stipulations outlined in the Offer to Purchase document are legally binding and critical for understanding the implications of the Tender Offers. The fact that Ball Corporation reserves the right to amend, extend, or terminate the Tender Offers or waive any condition without taking similar action with respect to the other offer is a common legal provision that provides the company with flexibility in managing the Tender Offers. Stakeholders should be aware of these provisions as they could affect the timing and success of the Tender Offers.
Additionally, the legal framework governing these transactions ensures that Ball is not obligated to accept for payment, or pay for, any tendered Notes if certain conditions are not satisfied. This protects the company from unforeseen circumstances that may arise before the completion of the Tender Offers.
The following table lists the aggregate principal amount of each series of Notes that were validly tendered and accepted in each Tender Offer as of 5:00 p.m.,
Title of Security | CUSIP | Principal Amount | Aggregate Principal Amount | Total Consideration |
| 058498AT3 | |||
| 058498AV8 |
_________________ | |
(1) | Total Consideration (as defined below) per |
The Tender Offers are being made upon the terms and subject to conditions described in the Offer to Purchase, dated February 14, 2024 (as it may be amended or supplemented from time to time, the "Offer to Purchase"), which sets forth a detailed description of the Tender Offers.
Each Tender Offer will expire at 5:00 p.m., New York City Time, on March 14, 2024, unless such Tender Offer is extended or earlier terminated (the "Expiration Time"). Ball has elected to exercise its right to make payment for Notes that were validly tendered prior to or at the Early Tender Time and that are accepted for purchase on February 29, 2024 (the "Early Settlement Date").
The applicable total consideration listed in the table above (with respect to each series of Notes, the "Total Consideration") will be paid for each
In addition to the Total Consideration or the Tender Offer Consideration, as applicable, all holders of Notes accepted for purchase will also receive accrued and unpaid interest on Notes validly tendered and accepted for purchase from the applicable last interest payment date up to, but excluding, the applicable settlement date ("Accrued Interest").
The Total Consideration, Accrued Interest and the costs and expenses of the Tender Offers are expected to be paid with funds provided by the net cash proceeds from the closing of the previously announced sale of Ball's aerospace business.
Each Tender Offer will expire at the applicable Expiration Time. Payment for the Notes that are validly tendered after the Early Tender Time but prior to or at the Expiration Time and that are accepted for purchase will be made on a date promptly following the Expiration Time, which is currently anticipated to be March 15, 2024, the business day after the Expiration Time.
Each Tender Offer is contingent upon the satisfaction of certain conditions. If any of the conditions are not satisfied, Ball is not obligated to accept for payment, or pay for, and may delay the acceptance for payment of, any tendered Notes and may even terminate one or both Tender Offers. Ball reserves the right to amend, extend, terminate or waive any condition with respect to one Tender Offer without taking a similar action with respect to the other Tender Offer. Full details of the terms and conditions of the Tender Offers are included in the Offer to Purchase.
Information Relating to the Tender Offers
Requests for documents relating to the Tender Offers should be directed to D.F. King & Co., Inc., the tender agent and information agent, by telephone at +1 (866) 796-1271 (toll-free) or by email at ball@dfking.com. BNP Paribas Securities Corp. and Morgan Stanley & Co. LLC are serving as dealer managers in connection with the Tender Offers. Investors with questions regarding the terms and conditions of the Tender Offers may contact the dealer managers as follows:
BNP Paribas Securities Corp. | Morgan Stanley & Co. LLC |
This press release is for informational purposes only and does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders with respect to, the Notes. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation or sale would be unlawful. Each Tender Offer is being made solely pursuant to the Offer to Purchase made available to holders of the Notes. None of Ball or its affiliates, their respective boards of directors, the dealer managers, the tender agent and information agent or the trustee with respect to any series of Notes is making any recommendation as to whether or not holders should tender or refrain from tendering all or any portion of their Notes in response to each Tender Offer. Holders are urged to evaluate carefully all information in the Offer to Purchase, consult their own investment and tax advisors and make their own decisions whether to tender Notes in each Tender Offer, and, if so, the principal amount of Notes to tender.
About Ball Corporation
Ball Corporation supplies innovative, sustainable aluminum packaging solutions for beverage, personal care and household products customers. Ball Corporation employs 16,000 people worldwide (excluding divested aerospace staff) and reported 2023 net sales of
Cautionary Statement Regarding Forward-Looking Statements
This release contains "forward-looking" statements concerning future events and financial performance. Words such as "expects," "anticipates," "estimates," "believes," and similar expressions typically identify forward looking statements, which are generally any statements other than statements of historical fact. Such statements are based on current expectations or views of the future and are subject to risks and uncertainties, which could cause actual results or events to differ materially from those expressed or implied. You should therefore not place undue reliance upon any forward-looking statements, and they should be read in conjunction with, and qualified in their entirety by, the cautionary statements referenced below. Ball undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Key factors, risks and uncertainties that could cause actual outcomes and results to be different are summarized in filings with the Securities and Exchange Commission, including Exhibit 99 in Ball's Form 10-K, which are available on Ball's website and at www.sec.gov. Additional factors that might affect: a) Ball's packaging segments include product capacity, supply, and demand constraints and fluctuations and changes in consumption patterns; availability/cost of raw materials, equipment, and logistics; competitive packaging, pricing and substitution; changes in climate and weather and related events such as drought, wildfires, storms, hurricanes, tornadoes and floods; footprint adjustments and other manufacturing changes, including the startup of new facilities and lines; failure to achieve synergies, productivity improvements or cost reductions; unfavorable mandatory deposit or packaging laws; customer and supplier consolidation; power and supply chain interruptions; changes in major customer or supplier contracts or loss of a major customer or supplier; inability to pass through increased costs; war, political instability and sanctions, including relating to the situation in
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SOURCE Ball Corporation
FAQ
What did Ball Corporation announce regarding its Senior Notes?
What is the Total Consideration mentioned in the PR?
How are the Tender Offers funded?
When will the payment for Notes tendered after the Early Tender Time be made?
Who are the dealer managers in connection with the Tender Offers?
