8-KMaterial AgreementsFinancial EventsShareholder Matters+2

Amcor plc 8-K Report, Material Agreement (Jun 17, 2019)

Filed June 17, 2019For Securities:AMCRAMCCF

Summary

Amcor plc filed this 8-K report on June 17, 2019, primarily detailing the successful completion of exchange offers and consent solicitations for existing senior notes issued by Amcor Finance (USA), Inc. (AFUI) and Bemis Company, Inc. These offers aimed to exchange outstanding notes for newly issued notes and cash, and also to solicit consents to amend existing indentures, thereby modifying covenants and reporting requirements. The offers expired on June 11, 2019, with significant principal amounts of various note series tendered and exchanged, leading to a substantial reduction in the outstanding principal of the legacy Bemis and Amcor notes. Furthermore, the filing details significant financing activities undertaken on June 11, 2019, in connection with the prior acquisition of Bemis. Amcor plc, along with Bemis and other subsidiaries, entered into various joinder and guaranty supplement agreements to integrate Bemis into existing multi-year credit facilities (three-year, four-year, five-year, and 364-day revolving credit facilities, as well as a term loan facility). These actions effectively make Bemis a borrower and guarantor under these facilities, which are administered by JPMorgan Chase Bank. This consolidation of debt and integration of financing reflects a strategic move following the completion of the Bemis acquisition.

Key Highlights

  • 1Successful completion of exchange offers for Bemis and Amcor existing senior notes, with significant principal amounts tendered and exchanged.
  • 2Amended indentures for existing Bemis and Amcor notes to modify covenants, reporting requirements, and events of default.
  • 3Issuance of new senior guaranteed notes by Bemis and AFUI in exchange for existing notes, totaling up to $1,100,000,000 aggregate principal amount for each issuer.
  • 4Integration of Bemis Company, Inc. into Amcor's existing credit facilities following its acquisition, including joining three-year, four-year, five-year, and 364-day revolving credit facilities and a term loan facility.
  • 5Amcor plc and Bemis have become guarantors under these newly integrated credit facilities.
  • 6The new notes issued have terms (interest rate, maturity, redemption) mirroring their respective existing notes.
  • 7Registration rights agreements were entered into for the new notes, requiring Amcor to file exchange offer registration statements within specified timelines or face increased interest rates.

Frequently Asked Questions

The primary purpose was to consolidate Amcor's and Bemis's debt structures following the acquisition of Bemis. The exchange offers allowed holders of existing Bemis and Amcor notes to swap them for new, guaranteed notes issued by Bemis and Amcor, respectively, and cash. Concurrently, consents were solicited to amend the indentures governing the existing notes to modify certain covenants and reporting requirements, aligning them with Amcor's post-acquisition financial framework.

The acquisition has led to the integration of Bemis into Amcor's financing structure. Bemis has become a borrower and guarantor under several of Amcor's existing credit facilities, including multi-year revolving credit facilities (3-year, 4-year, 5-year) and a 364-day revolving credit facility, as well as a term loan facility. This integration streamlines Amcor's overall debt management and provides a unified credit platform.

The registration rights agreements require Amcor to file registration statements with the SEC within 270 days (effective within 365 days) of the settlement date for an exchange offer. This process aims to create freely tradable notes (Registered Exchange Notes). If Amcor fails to meet these deadlines or complete the exchange offer, the interest rate on the new notes could increase, which would be detrimental to the company's interest expenses.

Yes, the exchange offers included consent solicitations to amend the indentures governing the existing Bemis and Amcor notes. The purpose of these amendments was to eliminate or modify certain covenants, reporting requirements, restrictive provisions, and events of default, likely to align them with Amcor's standard terms and reduce administrative burdens.