Rallye launches tender offer for seven note series, commercial paper

By Marisa Wong

Los Angeles, Jan. 22 – Rallye launched a global tender offer for up to €75 million of its unsecured debt, including bonds and commercial paper, as part of its implementation of a safeguard plan to repay its liabilities to be rescheduled between 2023 and 2030.

The company said the purpose of the tender offer is to give holders of unsecured debt the opportunity to have all or part of their claims repurchased at a price to be determined through a modified Dutch auction procedure and to improve its debt profile.

Rallye is inviting holders to sell the following securities:

• 3.4% notes due Jan. 31, 2022 (ISIN: FR0012017903), all €110 million of which is outstanding;

• 4% notes due Nov. 23, 2020 (ISIN: CH0341440326), all CHF 75 million of which is outstanding;

• 4% notes due April 2, 2021 (ISIN: FR0011801596), with €464.6 million of the original €500 million outstanding;

• 4.371% notes due Jan. 23, 2023 (ISIN: FR0013257557), all €350 million of which is outstanding;

• 3Ό% notes due Feb. 8, 2024 (ISIN: CH0398013778), all CHF 95 million of which is outstanding;

• 5Ό% non-dilutive cash-settled notes, exchangeable for cash, due Feb. 1, 2022 (ISIN: FR0013215415), all €200 million of which is outstanding;

• 1% notes, exchangeable for ordinary shares of Casino, due Oct. 2, 2020 (ISIN: FR0011567908), with €4,628,847.61 of the original €374,999,962.14 outstanding; and

• €58.5 million outstanding commercial paper (ISIN: FR0125661951, FR0125557555, FR0125613697, FR0125510067, FR0125512758, FR0125500134 and FR0125629693).

For any debt instrument, the minimum purchase price will be 12.5% of the amount of the outstanding claim under that debt instrument, including any accrued interest, and the maximum purchase price will be 20% of the amount of the outstanding claim.

All holders will be able to make non-competitive offers or competitive offers.

The tender offer will expire at 11 a.m. ET on Feb. 5.

Financing for the tender offer will consist of a bond issue and a bank loan totaling €82.4 million, for which Rallye has already obtained firm commitments form Marc Ladreit de Lacharriere and from banks.

Completion of the tender offer is subject to (i) approval by the Paris Commercial Court of an amendment to Rallye’s safeguard plan, originally approved on Feb. 28, 2020, in order to authorize the effective completion of the tender offer and the setting up of the new financing and (ii) the availability of the proceeds of the new financing.

Rallye said it will seek such approval immediately after announcing the results of the tender offer and subject to those results.

Settlement is slated for April 1.

Lucid Issuer Services Ltd. (+44 20 7704 0880, rallye@lucid-is.com, www.lucid-is.com/rallye) is the tender agent.

Financing details

The new financing will bear, at Rallye’s discretion for each interest period, (i) cash interest at Euribor, subject to a 0% floor, for the relevant 12-month interest period plus an 800 basis point margin or (ii) interest capitalized annually at Euribor, subject to a 0% floor, for the relevant 12-month interest period plus a 1,200 bps margin.

An arrangement fee of 3% of the amount drawn under the new financing will be due by Rallye to the lenders.

A non-use fee equal to 35% of the margin retained for capitalized interest, i.e., 4.2% per annum, will also be applied to the unused portion of the new financing throughout the availability period. In the absence of any drawdown until April 30, 2021 and subsequent cancelation of the lenders’ commitments under the new financing, the amount due under the non-use fee will be €400,000.

This new financing has a maturity of four years from the signing of the agreements. Up to two drawdowns may be made until June 30, 2022 at the latest.

Rallye may also decide to make early repayments in amounts of at least €10 million, subject to the payment of break-up fees and an early repayment fee of at least 27% of the principal repaid under the new financing.

As guarantee for this new financing, 3.3 million Casino shares held by Rallye and currently free of any encumbrance will be transferred by Rallye into fiduciary trust to the benefit of the lenders under the new financing.

Rallye is a Paris-based distributor of food and sporting goods products.

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