AptarGroup, Inc. (NYSE:ATR) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
Private Placement of Senior Notes
On July 19, 2017, AptarGroup, Inc. (the “Company”) and its wholly owned subsidiary, AptarGroup UK Holdings Limited (the “Issuer” or “Aptar UK”), entered into a Note Purchase and Guaranty Agreement (the “Note Purchase Agreement”) with the purchasers listed in the Purchaser Schedule thereto to which the Issuer agreed to sell (i) €100,000,000 aggregate principal amount of its 0.98% Senior Notes, Series D, due July 19, 2023 (the “Series D Notes”) and (ii) €200,000,000 aggregate principal amount of its 1.17% Senior Notes, Series E, due July 19, 2024 (the “Series E Notes” and, together with the Series D Notes, the “Notes”) in a private placement to various institutional investors. The payment by the Issuer of all amounts due with respect to the Notes, and the payment and performance by the Issuer of its obligations under the Note Purchase Agreement, are absolutely and unconditionally guaranteed by the Company to the Note Purchase Agreement. The issuance and sale of the Notes occurred on July 19, 2017. The net proceeds from the sale of the Notes will allow the Issuer to create Euro-denominated funding given the Company’s significant business operations in the European Union. This cash may be used over time for a variety of purposes, including additional business development, capital expenditure, acquisitions or share repurchases.
The Notes bear interest on the outstanding principal balance at the stated rates per annum from the date of issuance, payable semi-annually in arrears on January 19 and July 19 of each year, commencing on January 19, 2018, until such principal becomes due and payable. The Notes are senior unsecured obligations of the Issuer and rank equal in right of payment with all other senior unsecured indebtedness of the Issuer.
The Note Purchase Agreement contains customary provisions for transactions of this type, including representations and warranties regarding the Company and its subsidiaries and various covenants, including covenants that require the Company to maintain, as of the end of each fiscal quarter, a Consolidated Leverage Ratio of no greater than 3.50 to 1.00 and a Consolidated Interest Coverage Ratio of no less than 3.00 to 1.00 (each term as defined in the Note Purchase Agreement). The Note Purchase Agreement provides for customary events of default, generally with corresponding grace periods, including payment defaults with respect to the Notes, covenant defaults, cross-defaults to other agreements evidencing indebtedness of the Company or its significant subsidiaries, certain judgments against the Company or its significant subsidiaries and events of bankruptcy involving the Company or its significant subsidiaries.
The Issuer may from time to time, at its option, upon notice, prepay prior to maturity all or any part of the principal amount of the Notes, together with accrued interest and the Make-Whole Amount and the Swap Reimbursement Amount (if any) (each term as defined in the Note Purchase Agreement). The Notes will automatically become immediately due and payable without notice upon the occurrence of an event of default involving insolvency or bankruptcy of the Company, the Issuer or any significant subsidiary. In addition, by notice given to the Company and the Issuer, any holder or holders of more than 50% in principal amount of the Notes, at its or their option, may declare all of the Notes to be immediately due and payable upon the occurrence and continuation of any other event of default, and, by notice given to the Company and the Issuer, any holder of the Notes may, at its option, declare all of the Notes held by such holder to be immediately due and payable in the event that the Issuer defaults in the payment of any amount due and payable under the Note Purchase Agreement.
