Berry Global Group, Inc. Announces Proposed Offering of First Priority Senior Secured Notes

Rhea-AI Summary

Berry Global Group, Inc. (NYSE: BERY) announced the issuance of a new series of first priority senior secured notes by its subsidiary, Berry Global, Inc. The net proceeds will be used to prepay a portion of existing indebtedness and to pay related fees and expenses. The Notes are being offered to qualified institutional buyers and non-U.S. investors. This offering is not registered under the Securities Act and may not be offered or sold in the United States without an effective registration statement or applicable exemption.

Financial Analyst

The issuance of a new series of first priority senior secured notes by Berry Global Group, Inc. represents a strategic financial maneuver aimed at optimizing the company's capital structure. By electing to prepay a portion of its existing indebtedness, Berry is likely seeking to reduce interest expenses and extend the maturity profile of its debt. This proactive approach to liability management can be indicative of a robust financial strategy that prioritizes balance sheet strength and creditworthiness.

Investors and credit rating agencies will be closely monitoring the terms of the issuance, such as the interest rate and the total amount of notes to be issued, as these factors will influence Berry's interest coverage ratio and leverage metrics. The potential reduction in interest expenses could lead to improved net income and cash flows, which may be viewed favorably by the stock market. However, it is crucial to consider the demand for such notes within the current economic climate, as well as the company's ability to service its debt amidst potential interest rate fluctuations.

Market Research Analyst

The decision by Berry Global Group to issue first priority senior secured notes and target qualified institutional buyers and non-U.S. investors reflects a strategic move to tap into a diverse pool of capital. It is essential to understand the investor appetite for corporate debt within the packaging industry, especially given the sector's sensitivity to economic cycles and raw material costs. The company's success in this debt offering could signal market confidence in Berry's long-term growth prospects and operational efficiency.

Additionally, the choice to conduct the offering under Rule 144A and Regulation S suggests a targeted approach to reach investors who are capable of conducting thorough due diligence and are comfortable with the associated risks. The market's reception of this offering can provide insights into broader trends in private debt markets and investor sentiment towards the packaging sector, which could have implications for Berry's peers and the industry at large.

Legal Expert

The legal framework surrounding Berry Global Group's issuance of first priority senior secured notes is critical for ensuring compliance with securities regulations. The use of Rule 144A allows Berry to sell securities to qualified institutional buyers without the need for a public registration, streamlining the process and potentially reducing the time to market. However, this also limits the pool of potential investors to those who meet specific criteria, which could impact the liquidity and pricing of the notes.

Furthermore, the fact that the notes have not been registered under the Securities Act nor any state or other securities laws means that the resale of these securities could be subject to certain restrictions, which investors must be aware of. The reliance on Regulation S for sales outside the United States indicates an intention to access global capital, but it also necessitates careful navigation of international securities laws and disclosure requirements.

EVANSVILLE, Ind.--(BUSINESS WIRE)-- Berry Global Group, Inc. (NYSE: BERY) (“Berry”) announced today that its wholly-owned subsidiary, Berry Global, Inc. (the “Issuer”), plans to issue a new series of first priority senior secured notes (the “Notes”).

The net proceeds from the offering are intended to prepay a portion of certain existing indebtedness of the Issuer and to pay certain fees and expenses related to the offering.

The Notes are being offered only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States, only to non-U.S. investors pursuant to Regulation S. The Notes have not been registered under the Securities Act or any state or other securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful. Any offers of the Notes will be made only by means of a private offering memorandum.

About Berry Global

At Berry Global Group, Inc. (NYSE: BERY), we create 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 more than 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 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/20240109308397/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 Group, Inc.

FAQ

What did Berry Global Group, Inc. announce?

Berry Global Group, Inc. announced the issuance of a new series of first priority senior secured notes by its subsidiary, Berry Global, Inc.

What will the net proceeds be used for?

The net proceeds will be used to prepay a portion of existing indebtedness and to pay related fees and expenses.

Who are the Notes being offered to?

The Notes are being offered to qualified institutional buyers and non-U.S. investors.

Is the offering registered under the Securities Act?

No, the offering is not registered under the Securities Act and may not be offered or sold in the United States without an effective registration statement or applicable exemption.