ALERIS CORPORATION (NYSE:ARS) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry into a Material Definitive Agreement. |
On February14, 2017, Aleris International, Inc. (the
Company) completed the issuance of an additional $250
million aggregate principal amount of 9.500% senior secured notes
due 2021 (the Additional Notes) in a private offering
under Rule 144A and Regulation S of the Securities Act of 1933,
as amended. The Company initially issued $550 million aggregate
principal amount of 9.500% Senior Secured Notes due 2021 on
April4, 2016, which remain outstanding (the Initial Notes
and together with the Additional Notes, the Notes).
The Company received net proceeds of approximately $261.0 million
from the issuance of the Additional Notes after deducting the
initial purchasers discount and estimated expenses payable in
connection with the offering. The Company intends to use the net
proceeds of the sale for general corporate purposes, which may
include working capital and/or capital expenditures.
The Additional Notes were issued under an Indenture (the Base
Indenture), dated as of April4, 2016, by and among the
Company, Aleris Corporation (Parent), the subsidiary
guarantors listed therein (individually, a Subsidiary
Guarantor and collectively, the Subsidiary Guarantors,
and together with Parent, the Guarantors) and U.S. Bank
National Association, as trustee (the Trustee) and as
collateral agent (the Collateral Agent), as supplemented
by the first supplemental indenture (the Supplemental
Indenture and together with the Base Indenture, the
Indenture), dated as of February14, 2017, by and among the
Company, the Guarantors, the Trustee and the Collateral Agent,
relating to the Additional Notes. The Additional Notes together
with the Initial Notes will be treated as a single series of debt
securities for all purposes under the Indenture, including,
without limitation, waivers, amendments, redemptions and offers
to purchase.
The Notes bear interest at an annual rate of 9.500%. Interest is
payable on the Notes semi-annually in arrears on April1 and
October1 of each year. Interest on the Additional Notes will be
deemed to have accrued from October1, 2016 and the first interest
payment date for the Additional Notes will be April1, 2017. The
Notes mature on April1, 2021, unless earlier redeemed or
repurchased by the Company. The Notes are secured by a
first-priority lien on substantially all of the Companys and the
guarantors owned and material U.S. real property, equipment and
intellectual property and stock of the Company and the guarantors
(other than Parent) and other subsidiaries (including 50% of the
outstanding non-voting stock (if any) and 65% of the outstanding
voting stock of certain first-tier foreign subsidiaries and
certain first-tier foreign subsidiary holding companies), but
subject to permitted liens and excluding (i)inventory, accounts
receivable, deposit accounts and related assets, which assets
secure the Companys $600 million asset backed revolving credit
facility on a first-priority basis, (ii)the assets associated
with the Companys Lewisport, Kentucky facility and (iii)certain
other excluded assets.
From and after April1, 2018, the Company may redeem the Notes, in
whole or in part, at a redemption price of 104.750% of the
principal amount of the Notes, plus accrued and unpaid interest,
if any, to the redemption date, declining ratably to 50% of the
principal amount of the Notes, plus accrued and unpaid interest,
if any, to the redemption date, on or after April1, 2020. Prior
to April1, 2018, the Company may, at its option, redeem up to 40%
of the aggregate principal amount of the Notes with money that
the Company raises in certain equity offerings at a redemption
price of 109.500%, plus accrued and unpaid interest, if any, to
the redemption date. The Company may make such redemption so long
as, immediately after the occurrence of any such redemption, 60%
of the aggregate principal amount of the Initial Notes and the
aggregate principal amount of the Additional Notes and any other
additional notes issued after April4, 2016 remains outstanding.
Additionally, at any time prior to April1, 2018, the Company may
redeem some or all of the Notes at a redemption price equal to
50% of the principal amount of the Notes, plus the applicable
premium as provided in the Indenture and accrued and unpaid
interest, if any, to the redemption price.
If the Company experiences a change of control event specified in
the Indenture, the Company must offer to purchase all of the
Notes at a price equal to 101% of the principal amount of the
Notes, plus accrued and unpaid interest, if any, to (but
excluding) the date of purchase. In addition, if the Company
engages in asset sales and does not invest the cash proceeds in
the Companys business or permanently reduce certain debt, the
Company will be required to use the proceeds of such asset sales
to make an offer to purchase a principal amount of the Notes
equal to the net cash proceeds from such asset sale at a price of
50% of the principal amount of the Notes, plus accrued and unpaid
interest, if any, to (but excluding) the date of purchase.
Subject to certain limitations and exceptions, the Indenture
contains covenants limiting the Companys ability to, among other
things:
| incur additional debt; |
|
pay dividends or distributions on the Companys capital stock or redeem, repurchase or retire the Companys capital stock or subordinated debt; |
| issue preferred stock of restricted subsidiaries; |
| make certain investments; |
|
create liens on the Companys or its Subsidiary Guarantors assets to secure debt; |
| enter into sale and leaseback transactions; |
|
create restrictions on the payment of dividends or other amounts to the Company from the Companys restricted subsidiaries that are not guarantors of the Notes; |
| enter into transactions with affiliates; |
| merge or consolidate with another Company; and |
|
sell assets, including capital stock of the Companys subsidiaries. |
If any event of default occurs and is continuing under the
Indenture, the Trustee or holders of at least 30% in principal
amount of the Notes may declare the principal, premium, if any,
interest and any other monetary obligations on all outstanding
Notes to be due and payable immediately, subject to certain
conditions provided in the Indenture. These amounts become due
and payable without any further action or notice in the case of
certain events of bankruptcy or insolvency with respect to the
Company. The following events constitute events of default under
the Indenture: (1)default in payment when due and payable, upon
redemption, acceleration or otherwise, of principal of, or
premium, if any, on the Notes; (2)default for 30 days or more in
the payment when due of interest on or with respect to the Notes;
(3)failure by the Company or any Subsidiary Guarantor for 60 days
after receipt of written notice given by the Trustee or holders
of at least 30% in principal amount of then outstanding Notes to
comply with any of its other agreements in the Indenture or
Notes; (4)default under any mortgage, indenture, or instrument
under which there is issued, secured or evidenced any
indebtedness for money borrowed by the Company or any restricted
subsidiary, if both (a)such default results from the failure to
pay any principal of such indebtedness at its stated final
maturity or relates to an obligation that causes such
indebtedness to become due prior to its stated maturity and
(b)the principal amount of such indebtedness, together with the
principal amount of any other such indebtedness in default,
aggregate $40 million or more at any one time outstanding;
(5)failure by the Company or any significant subsidiary to pay
final judgments aggregating in excess of $40 million, which final
judgments remain unpaid, undischarged and unstayed for more than
60 days after such judgment becomes final; (6)certain events of
bankruptcy or insolvency with respect to the Company or any
significant subsidiary; and (7)the subsidiary guarantee of any
significant subsidiary shall for any reason cease to be in full
force and effect or be declared null and void or any responsible
officer of any Subsidiary Guarantor that is a significant
subsidiary denies that it has any further liability under its
subsidiary guarantee.
U.S. Bank National Association, the Trustee and Collateral Agent
under the Indenture, or any of its affiliates, in its individual
or any other capacity, may make loans to, accept deposits from
and perform services for the Company or an affiliate of the
Company, and may otherwise deal with the Company or an affiliate
of the Company, as if it were not the Trustee and Collateral
Agent.
A copy of the Base Indenture and Supplemental Indenture are filed
as Exhibits 4.1 and 4.2, respectively, to this Current Report and
are hereby incorporated by reference herein. The form of Note
(included as Exhibit 1 to Rule 144A / Regulation S Appendix of
the Indenture filed as Exhibit 4.1) is filed as Exhibit 4.3 to
this Current Report and is hereby incorporated by reference
herein. The foregoing descriptions of the Indenture and Notes do
not purport to be complete and are qualified in their entirety by
reference to the full text of the Base Indenture, Supplemental
Indenture and Notes which are filed as Exhibits 4.1, 4.2 and 4.3,
respectively.
| Item2.03 |
Creation of a Direct Financial Obligation or an Obligation under and Off-Balance Sheet Arrangement of a Registrant. |
The disclosures above under Item1.01 of this Current Report are
also responsive to Item2.03 of this Current Report and are hereby
incorporated by reference into this Item2.03.
| Item9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| 4.1 |
Indenture, dated as of April4, 2016, by and among the Company, the Guarantors named therein and U.S. Bank National Association, as trustee and collateral agent (filed as Exhibit 4.1 to Aleris Corporations Current Report on Form 8-K (File No. 333-185443) filed on April8, 2016, and incorporated herein by reference). |
|
| 4.2 |
First Supplemental Indenture, dated as of February14, 2017, by and among the Company, the Guarantors named therein and U.S. Bank National Association, as trustee and collateral agent. |
|
| 4.3 |
Form of 9.500% Senior Secured Notes due 2021 (included within the Indenture filed as Exhibit 4.1). |
About ALERIS CORPORATION (NYSE:ARS)
Aleris Corporation is a holding company. The Company is engaged in the manufacture and sale of aluminum rolled products. The Company conducts its business and operations through its subsidiary, Aleris International, Inc. The Company operates through three segments: North America, Europe and Asia Pacific. The North America segment includes approximately nine manufacturing facilities located across the United States that produce rolled aluminum and coated products for the building and construction, truck trailer, automotive, consumer durables, other general industrial and distribution end uses. The Europe segment includes approximately two aluminum rolling mills and an aluminum cast house that produce aerospace plate and sheet, clad brazing sheet and heat-treated plate, among others. The Asia Pacific segment includes the operations of the Zhenjiang rolling mill, which produces plate products for the aerospace, engineering, distribution and other transportation end uses. ALERIS CORPORATION (NYSE:ARS) Recent Trading Information
ALERIS CORPORATION (NYSE:ARS) closed its last trading session at 0.0000 with shares trading hands.