Novelis Inc.
01/15/2025 | Press release | Distributed by Public on 01/15/2025 05:01
Material Agreement Form 8 K
Item 1.01 Entry into a Material Definitive Agreement.
On January 13, 2025, Novelis Corporation (the "Issuer"), a wholly owned subsidiary of Novelis Inc. (the "Company"), completed the issuance and sale of $750,000,000 aggregate principal amount of 6.875% senior notes due 2030 (the "Notes"). The net proceeds of the offering will be used to repay $738 million of outstanding borrowings under the Company's revolving credit facility and to use any remaining net proceeds to fund cash on the Company's balance sheet for general corporate purposes.
The Notes were issued pursuant to an indenture, dated as of January 13, 2025 (the "Indenture"), among the Issuer, the Company, as guarantor, the subsidiary guarantors named therein and Regions Bank, as trustee (the "Trustee"). The Indenture provides, among other things, that the Notes are the senior unsecured obligations of the Issuer and are guaranteed, jointly and severally, on a senior unsecured basis, by the Company and certain of its subsidiaries and certain of the Company's other subsidiaries that become a borrower or guarantor under certain credit facilities of the Company.
Pursuant to the Indenture, the Notes will mature on January 30, 2030, and will accrue interest at a rate of 6.875% per year. Interest on the Notes will be payable semi-annually in arrears on each January 30 and July 30, commencing on July 30, 2025.
Prior to January 30, 2027, the Issuer may redeem all or a portion of the Notes at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus the "make-whole" premium as provided in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Commencing January 30, 2027, the Issuer may redeem all or a portion of the Notes at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to but excluding, the date of redemption. In addition, prior to January 30, 2027, the Company may also redeem up to 40% of the original aggregate principal amount of the Notes (including any additional Notes) with the proceeds of certain equity offerings, at a redemption price equal to 106.875% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to but excluding the redemption date; provided that at least 50% of the original aggregate principal amount of the Notes (including additional Notes) issued remains outstanding.
Upon a Change of Control Triggering Event (as defined in the Indenture) with respect to the Notes, the Issuer must offer to purchase the Notes at a purchase price of 101% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to but excluding the purchase date, subject to certain exceptions including in the case where the Issuer (or any affiliate of the Issuer) has made an Alternate Offer (as defined in the Indenture), which cash price will be equal to or higher than such 101% of the principal amount of the Notes. In addition, if the Company or its restricted subsidiaries engage in certain asset sales and do not invest such proceeds or permanently reduce certain debt, up to an amount equal to the Net Available Cash (as defined in the Indenture) from such asset sale, within a specified period of time, the Issuer will be required to use a portion of the proceeds of such asset sales to make an Asset Sale Offer (as defined in the Indenture) to all holders of the Notes, and if required or permitted by the terms of any Debt (as defined in the Indenture) that ranks pari passu in right of payment with the Notes, to the holders of such pari passu Debt at a price of 100% of the principal amount of the Notes (or accreted value thereof, if less), plus accrued and unpaid interest, if any, to the date fixed for the closing of such offer.
The Indenture contains customary covenants that will limit the Company's ability and the ability of certain of its subsidiaries (including the Issuer) to (1) incur additional debt and provide additional guarantees, (2) pay dividends beyond certain amounts and make other restricted payments, (3) create or permit certain liens, (4) make certain asset sales, (5) use the proceeds from the sales of assets and subsidiary stock, (6) create or permit restrictions on the ability of certain of the Company's subsidiaries (including the Issuer) to pay dividends or make other distributions to the Company or certain of the Company's subsidiaries, as applicable, (7) engage in certain transactions with affiliates, (8) designate subsidiaries as unrestricted subsidiaries and (9) consolidate, merge or transfer all or substantially all of the Company's assets and the assets of certain of the Company's subsidiaries. During any future period in which either Standard & Poor's Ratings Services, a Standard & Poor's Financial Services LLC business, or Moody's Investors Service, Inc. have assigned an investment grade credit rating to the Notes and no default or event of default under the Indenture has occurred and is continuing, most of the covenants under the Indenture will be suspended. The Indenture also contains customary events of default.
The Notes and the related guarantees have not been registered under the Securities Act of 1933, as amended (the "Securities Act") or any state securities laws. The Notes were sold to qualified institutional buyers pursuant to Rule 144A and outside the United States pursuant to Regulation S of the Securities Act.
This Current Report on Form 8-K does not constitute an offer to sell any securities or a solicitation of an offer to purchase any securities.
The Indenture and the form of Note are filed as Exhibits 4.1 and 4.2 to this Current Report on Form 8-K and are incorporated herein by reference. The above descriptions of the material terms of the Indenture and the Notes are qualified in their entirety by reference to such exhibits.