MALLINCKRODT Item 7.01. Regulation FD Disclosure.
Beginning on
Each of the Noteholders has entered into a confidentiality agreement with Mallinckrodt. Pursuant to the confidentiality agreements, Mallinckrodt has agreed to disclose publicly information provided by Mallinckrodt to the Noteholders that constitutes material non-public information on a specified date. The information in this Current Report on Form 8-K is being furnished, in part, to satisfy Mallinckrodt's public disclosure obligations under the confidentiality agreements.
As of
Term Debtor Proposal
Amount ("Exchange Equivalent to the Optional Redemption price in the existing
Ratio") indenture at the Exit Date (T+50 until 4/15/22, then the call
schedule) plus 2.00% of par
Notes Senior Secured First Lien Notes (the "Exchange First Lien Notes")
Issuers Mallinckrodt International Finance S.A. and Mallinckrodt CB LLC
Obligors • Same as the obligors on Deferred Cash Payments, provided that any
obligations on account of the Exchange First Lien Notes shall be
guaranteed by the same entities that guarantee the (i) existing
First Lien Notes, (ii) existing credit agreement debt, as amended
and/or restated, and (iii) Takeback Second Lien Notes
• Subject to satisfactory diligence around exclusion of Mallinckrodt
Holdings GmbH
Coupon Payable in cash at 6.25%
Maturity 7 years following Plan Effective Date
Collateral/Priority Pari passu with the existing credit agreement debt, as amended
and/or restated
Put Puttable to the issuer at 101% of par upon a change of control
Equity Claw Equity claw consistent with current indenture for two years post
emergence, subject to any equity offering proceeds being first used
to pay down the tort prepayment option
Call Protections • T+50 make whole for 3 years after Plan Effective Date
• Callable at 103.125% of par in year 4
• Callable at 101.563% of par in year 5
• Par thereafter
Covenants Substantially same covenants as credit agreement debt as amended,
adjusted for indenture-style documentation (including removing non
indenture-style provisions)
Optional Redemption At the Company's option, in lieu of issuing the Exchange First Lien
Alternative Notes, existing First Lien Notes may be refinanced at, or prior to,
exit at the Exchange Ratio plus accrued and unpaid interest
Exit Fee None
Other • No change to terms of existing 2L notes, other than potential
modification of covenants to match 1L notes
• Exchange consummated on the effective date of the Ch. 11 plan
• [Tax and bankruptcy implications to be reviewed and exact exchange
mechanism TBD]
• 1L noteholders to agree to not make any intercreditor claims while
RSA is in effect, or following Plan Effective Date in respect of the
existing 1L notes claims
• 1L and 2L noteholders to sign a joinder agreement and amendment to
the RSA
• 1L and 2L noteholders signing RSA required to agree to support
plan with respect to all claims and interests
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By contrast, the previous proposal circulated by the Noteholders to Mallinckrodt with respect to a Potential Transaction contemplated the following terms:
Term Noteholder Proposal
Amount ("Exchange Equivalent to the Optional Redemption price in the existing
Ratio") indenture at the Exit Date (T+50 until 4/15/22, then the call
schedule)
Notes Senior Secured First Lien Notes (the "Exchange First Lien Notes")
Issuers Mallinckrodt International Finance S.A. and Mallinckrodt CB LLC
Obligors • Same as the obligors on Deferred Cash Payments, provided that any
obligations on account of the Exchange First Lien Notes shall be
guaranteed by the same entities that guarantee the (i) existing
First Lien Notes, (ii) existing credit agreement debt, as amended
and/or restated, and (iii) Takeback Second Lien Notes
• Subject to satisfactory diligence around exclusion of Mallinckrodt
Holdings GmbH
Coupon Payable in cash at 7.00%
Maturity 6 years following Plan Effective Date; April 15, 2025 if
>$50 million of existing 2L Notes outstanding on or after
January 15, 2025
Collateral/Priority Pari passu with the existing credit agreement debt, as amended
and/or restated
Put Puttable to the issuer at 101% of par upon a change of control
Equity Claw Equity claw consistent with current indenture for two years post
emergence, subject to any equity offering proceeds being first used
to pay down the tort prepayment option
Call Protections • T+50 make whole for 3 years after Plan Effective Date
• Callable at 103.50% of par in year 4
• Callable at 101.75% of par in year 5
• Par thereafter
• Call protection applies upon bankruptcy
Covenants Substantially same covenants as credit agreement debt as amended,
adjusted for indenture-style documentation (including removing non
indenture-style provisions)
Optional Redemption At the Company's option, in lieu of issuing the Exchange First Lien
Alternative Notes, existing First Lien Notes may be refinanced at, or prior to,
exit at the Exchange Ratio + 3.5% of par plus accrued and unpaid
interest
Exit Fee 3.5% fee earned upon execution of documentation reflecting terms
herein; fee to be paid on the Plan Effective Date to all first lien
noteholders based on existing principal
Other • Exchange consummated on the effective date of the Ch. 11 plan
• Tax and bankruptcy implications to be reviewed and exact exchange
mechanism TBD
• 1L noteholders to agree to not make any intercreditor claims while
RSA is in effect, or following Plan Effective Date in respect of the
existing 1L notes claims
• 1L and 2L noteholders to sign a joinder agreement and amendment to
the RSA
The information contained in this Item 7.01 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, except as otherwise expressly set forth by specific reference in such a filing.
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