Berry Global Group, Inc. Announces Notes Exchange Offers

Rhea-AI Summary

Berry Global Group, Inc. (NYSE: BERY) announced the commencement of an offer to exchange up to $500,000,000 of the Issuer’s new 5.50% First Priority Senior Secured Notes due 2028 for an equal amount of the Issuer’s outstanding unregistered 5.50% First Priority Senior Secured Notes due 2028. The exchange offer is limited to holders of the Outstanding Notes and is scheduled to expire at 5:00 p.m. Eastern Time on February 27, 2024. The Exchange Notes are identical to the Outstanding Notes, except for certain differences related to registration and transfer restrictions.

Financial Analyst

From a financial standpoint, the exchange offer initiated by Berry Global Group, Inc. is a strategic move aimed at streamlining the company's debt structure. By exchanging unregistered notes for registered ones, Berry is enhancing the liquidity of these securities. This could potentially widen the pool of investors who are able to purchase the notes, as registered securities are generally more attractive to institutional investors due to fewer restrictions on their transfer.

The choice of a 5.50% interest rate for the new First Priority Senior Secured Notes is noteworthy. It is essential to compare this rate with the current market conditions and prevailing interest rates for similar debt instruments. If the rate is competitive, it might indicate the company's strong creditworthiness and the market's confidence in its ability to service its debt. Conversely, if the rate is higher than the industry average, it may suggest a risk premium associated with the company's future cash flows or credit profile.

Investors should also consider the implications of the exchange on the company's financial flexibility. By removing the registration rights and additional interest provisions, Berry could be reducing potential future liabilities associated with these clauses. However, it is critical to monitor the uptake of the exchange offer, as a low participation rate could indicate investor concerns or satisfaction with the current terms of the Outstanding Notes.

Legal Expert

Legally, the exchange offer is a routine transaction under the Securities Act of 1933, which requires companies to register securities that are publicly traded. The registration process involves disclosing important financial information and risks associated with the company, providing transparency for investors. The removal of the legend restricting transfer on the Exchange Notes indicates that Berry is complying with the necessary legal requirements to facilitate easier trading of these securities.

The different CUSIP number for the Exchange Notes is a technical detail, but it's important for tracking and identification purposes in the securities market. Additionally, the absence of transfer restrictions and registration rights on the Exchange Notes simplifies the legal structure of the notes, which could be seen as reducing legal complexity and potential future costs for the company.

It is also important to note the legal rights associated with the withdrawal of tendered notes. Investors have the flexibility to reconsider their decision to participate in the exchange offer before the expiration date, which is a standard investor protection mechanism in such transactions.

Market Research Analyst

Examining the market context, the timing of Berry's exchange offer could be influenced by broader market conditions, such as interest rate trends and investor sentiment towards corporate debt. If market interest rates are expected to rise, locking in a 5.50% rate now could be advantageous for both Berry and the note holders. Conversely, if rates are expected to fall, investors might be less inclined to exchange their notes for new ones with the same interest rate.

The impact of the exchange offer on Berry's stock market performance will depend on how the market interprets the company's financial strategy. A successful exchange could be perceived as a positive signal, indicating proactive financial management and a strong credit outlook. On the other hand, any issues with the execution of the exchange offer, such as an extension of the expiration date or low participation rates, could negatively affect investor confidence.

For stakeholders, the long-term benefits include potential improvements in Berry's credit ratings and a more streamlined capital structure. However, it's important to balance these benefits against any short-term fluctuations in the market's perception of Berry's financial health as a result of this transaction.

EVANSVILLE, Ind.--(BUSINESS WIRE)-- Berry Global Group, Inc. (NYSE: BERY) (“Berry”) announced today the commencement by Berry Global, Inc., Berry’s wholly owned subsidiary (the “Issuer”), of an offer to exchange up to $500,000,000 of the Issuer’s new 5.50% First Priority Senior Secured Notes due 2028 (the “Exchange Notes”), for an equal amount of the Issuer’s outstanding unregistered 5.50% First Priority Senior Secured Notes due 2028 (the “Outstanding Notes”), in a transaction registered under the Securities Act of 1933, as amended. The exchange offer is being conducted upon the terms and subject to the conditions set forth in a prospectus dated January 29, 2024, and the related letter of transmittal.

The Exchange Notes are identical in all material respects to the Outstanding Notes, except that (i) the Exchange Notes will be registered under the Securities Act of 1933 and will not bear any legend restricting their transfer; (ii) the Exchange Notes bear a different CUSIP number than the Outstanding Notes; (iii) the Exchange Notes will not be subject to transfer restrictions or entitled to registration rights; and (iv) the Exchange Notes will not be entitled to additional interest provisions applicable to the Outstanding Notes in some circumstances relating to the timing of the exchange offers.

The exchange offer is limited to holders of the Outstanding Notes. The exchange offer is scheduled to expire at 5:00 p.m. Eastern Time on February 27, 2024, unless extended. Outstanding Notes tendered pursuant to the exchange offer may be withdrawn at any time prior to the expiration date by following the procedures set forth in the offering prospectus and the related letter of transmittal.

Copies of the prospectus and the related letter of transmittal may be obtained from U.S. Bank Trust Company, National Association, which is serving as the exchange agent for the exchange offer. The address, telephone and facsimile number of U.S. Bank Trust Company, National Association are as follows:

By Hand, Overnight Mail, Courier, or Registered or Certified Mail:	By Facsimile:	For Information or Confirmation by Telephone:
Corporate Actions 111 Fillmore Ave E Mail Station EP-MN-WS2N St. Paul, MN 55107 1402 Attention: Specialty Finance Group Reference: Berry Global, Inc.	(651) 466-7367 Attention: Specialty Finance Group	(800) 934-6802

About Berry Global

At Berry Global Group, Inc. (NYSE: BERY), we create innovative packaging and engineered products that we believe make life better for people and the planet. We do this every day by leveraging our unmatched global capabilities, sustainability leadership, and deep innovation expertise to serve customers of all sizes around the world. Harnessing the strength in our diversity and industry-leading talent of over 40,000 global employees across more than 250 locations, we partner with customers to develop, design, and manufacture innovative products with an eye toward the circular economy. The challenges we solve and the innovations we pioneer benefit our customers at every stage of their journey. For more information, visit our website, or connect with us on LinkedIn or X. (BERY-F)

Forward Looking Statements

Certain statements and information in this release that are not historical, including statements relating to the Notes and the expected future performance of the Company, may constitute “forward looking statements” within the meaning of the federal securities laws and are presented pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “would,” “could,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “projects,” “outlook,” “anticipates” or “looking forward,” or similar expressions that relate to our strategy, plans, intentions, or expectations. All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates, and financial results or to our expectations regarding future industry trends are forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments.

These forward-looking statements are subject to risks and uncertainties that may change at any time, and therefore, our actual results may differ materially from those that we expected due to a variety of factors, including without limitation: (1) risks associated with our substantial indebtedness and debt service; (2) changes in prices and availability of resin and other raw materials and our ability to pass on changes in raw material prices to our customers on a timely basis; (3) risks related to acquisitions or divestitures and integration of acquired businesses and their operations, and realization of anticipated cost savings and synergies; (4) risks related to international business, including transactional and translational foreign currency exchange rate risk and the risks of compliance with applicable export controls, sanctions, anti-corruption laws and regulations; (5) increases in the cost of compliance with laws and regulations, including environmental, safety, and climate change laws and regulations; (6) labor issues, including the potential labor shortages, shutdowns or strikes, or the failure to renew effective bargaining agreements; (7) risks related to disruptions in the overall global economy, persistent inflation, supply chain disruptions, and the financial markets that may adversely impact our business; (8) risk of catastrophic loss of one of our key manufacturing facilities, natural disasters, and other unplanned business interruptions; (9) risks related to weather-related events and longer-term climate change patterns; (10) risks related to the failure of, inadequacy of, or attacks on our information technology systems and infrastructure; (11) risks that our restructuring programs may entail greater implementation costs or result in lower cost savings than anticipated; (12) risks related to future write-offs of substantial goodwill; (13) risks of competition, including foreign competition, in our existing and future markets; (14) risks related to market conditions associated with our share repurchase program; (15) risks related to market disruptions and increased market volatility; and (16) the other factors and uncertainties discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K filed on November 17, 2023 and subsequent filings with the Securities and Exchange Commission. We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. Accordingly, readers should not place undue reliance on those statements. All forward-looking statements are based upon information available to us on the date hereof. All forward-looking statements are made only as of the date hereof and we undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240129221430/en/

Investor Contact:

Dustin Stilwell

+1 812.306.2964

ir@berryglobal.com

Global Media Contact:

Anna Raben

+1 812.492.1387

mediarelations@berryglobal.com

Source: Berry Global

What is the purpose of Berry Global Group, Inc.'s exchange offer?

The purpose of the exchange offer is to exchange up to $500,000,000 of the Issuer’s new 5.50% First Priority Senior Secured Notes due 2028 for an equal amount of the Issuer’s outstanding unregistered 5.50% First Priority Senior Secured Notes due 2028.

What are the key details of the exchange offer?

The exchange offer is limited to holders of the Outstanding Notes and is scheduled to expire at 5:00 p.m. Eastern Time on February 27, 2024. The Exchange Notes are identical to the Outstanding Notes, except for certain differences related to registration and transfer restrictions.

How can Outstanding Notes tendered pursuant to the exchange offer be withdrawn?

Outstanding Notes tendered pursuant to the exchange offer may be withdrawn at any time prior to the expiration date by following the procedures set forth in the offering prospectus and the related letter of transmittal.

Who is serving as the exchange agent for the exchange offer?

U.S. Bank Trust Company, National Association, is serving as the exchange agent for the exchange offer.