Berry Global Group, Inc. Announces Pricing of Private Placement Notes Offering

Rhea-AI Summary

Berry Global Group, Inc. (NYSE: BERY) has announced the pricing of a private placement for $400 million in first priority senior secured notes due January 15, 2027. The notes, which will carry a 1.65% interest rate paid semiannually, are expected to close around June 14, 2021. Proceeds will be used to prepay existing term loans and cover offering expenses. The notes are guaranteed by Berry and its domestic subsidiaries, and are being offered solely to qualified institutional buyers and non-U.S. investors. They have not been registered under applicable securities laws.

Positive

• Issuance of $400 million in senior secured notes may improve liquidity.
• 1.65% interest rate is relatively low, potentially lowering financing costs.
• Proceeds earmarked for refinancing existing debt can enhance financial stability.

Negative

• Secured notes are second priority, which may pose risks if company faces financial challenges.
• Notes are being offered without registration, limiting investor access.

Berry Global Group, Inc. (NYSE: BERY) (“Berry”) announced today the pricing of a private placement launched June 8, 2021, by its wholly owned subsidiary, Berry Global, Inc. (the “Issuer”). The Issuer will issue $400,000,000 of first priority senior secured notes due 2027 (the “Notes”). The closing of the private placement offering is expected to occur on or about June 14, 2021.

The Notes will bear interest at a rate of 1.65%, payable semiannually, in cash in arrears, on January 15 and July 15 of each year, commencing on January 15, 2022. The Notes will mature on January 15, 2027.

The Notes will be guaranteed by Berry and each of the Issuer’s existing and future direct or indirect domestic subsidiaries that guarantees the Issuer’s senior secured credit facilities, existing first priority secured notes and existing second priority senior secured notes, subject to certain exceptions. The Notes and the guarantees thereof will be unsubordinated obligations of the Issuer and will rank equally in right of payment with all of the Issuer’s, and, in the case of the guarantees, to all of the guarantors’, existing and future unsubordinated debt. The guarantee by Berry will be unsecured. The Notes will be secured on a second priority basis by liens (subject to certain exceptions and permitted liens) on accounts receivable, inventory and certain related assets that secure the Issuer’s revolving credit facility, and on a first priority basis by liens on the property and assets of the Issuer and the subsidiary guarantors that secure the Issuer’s senior secured term loan credit facility, subject to certain exceptions.

The net proceeds from the offering are intended to prepay a portion of certain existing term loans of the Issuer and to pay certain fees and expenses related to the offering.

The Notes are being offered only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States, only to non-U.S. investors pursuant to Regulation S. The Notes have not been registered under the Securities Act or any state or other securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful. Any offers of the Notes will be made only by means of a private offering memorandum.

About Berry Global

At Berry Global Group, Inc. (NYSE:BERY), we create innovative packaging and engineered products that we believe make life better for people and the planet. We do this every day by leveraging our unmatched global capabilities, sustainability leadership, and deep innovation expertise to serve customers of all sizes around the world. Harnessing the strength in our diversity and industry leading talent of 47,000 global employees across more than 295 locations, we partner with customers to develop, design, and manufacture innovative products with an eye toward the circular economy. The challenges we solve and the innovations we pioneer benefit our customers at every stage of their journey. For more information, visit our website at www.berryglobal.com.

Forward-Looking Statements

Certain statements and information included in this release may constitute “forward-looking statements” within the meaning of the federal securities laws. You can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “would,” “could,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “project,” “outlook,” “anticipates” or “looking forward,” or similar expressions that relate to our strategy, plans, intentions, or expectations. All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results or to our expectations regarding future industry trends are forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results.

Important factors that could cause actual results to differ materially from our expectations, which we refer to as cautionary statements, are disclosed in Berry’s filings with the U.S. Securities and Exchange Commission (the “SEC”). In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained herein may not in fact occur. Accordingly, readers should not place undue reliance on those statements. All forward-looking statements are based upon information available to us on the date hereof. All forward-looking statements are made only as of the date hereof and we undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

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FAQ

What are the details of Berry Global's recent notes offering?

Berry Global is offering $400 million in senior secured notes due 2027, with a 1.65% interest rate, expected to close around June 14, 2021.

What will the proceeds from the Berry Global notes offering be used for?

The proceeds will be used to prepay existing term loans and cover fees associated with the offering.

Who can purchase Berry Global's new notes?

The notes are offered only to qualified institutional buyers and non-U.S. investors.

What is the maturity date of the Berry Global notes?

The notes will mature on January 15, 2027.

Is the offering of Berry Global's notes registered?

No, the notes have not been registered under the Securities Act or any state laws.