Mallinckrodt gives final results of exchange offer for five series

By Sarah Lizee

Olympia, Wash., Dec. 5 – Mallinckrodt plc wholly owned subsidiaries Mallinckrodt International Finance SA and Mallinckrodt CB announced the final results of their private offers to exchange several series of their notes for new notes.

As previously reported, the companies offered to exchange any and all of the 4 7/8% senior notes due 2020 for new 10% second-lien senior secured notes due 2025; and the 5¾% senior notes due 2022, 4¾% senior notes due 2023, 5 5/8% senior notes due 2023 and 5½% senior notes due 2025 for up to $355 million of the new notes.

By the expiration time at 11:59 p.m. ET on Dec. 4, the following amounts were tendered in the exchange:

• $83,171,000, or 11.9%, of the $698 million of outstanding 4 7/8% senior notes due 2020, with $70,153,000 of new notes to be delivered;

• $52,896,000, or 8%, of the $663.2 million of outstanding 5¾% senior notes due 2022, with $25,087,000 of new notes to be delivered;

• $216,419,000, or 61.8%, of the $350,076,000 of outstanding 4¾% senior notes due 2023 with $79,982,000 of new notes to be delivered;

• $144,687,000, or 21.9%, of the $659.36 million of outstanding 5 5/8% senior notes due 2023 with $61,459,000 of new notes to be delivered; and

• $208.93 million, or 35%, of the $596,137,000 of outstanding 5½% senior notes due 2025 with $86,187,000 of new notes to be delivered.

On Nov. 27, the issuer and the exchanging holders amended the exchange agreement to, among other things, (a) reduce the aggregate principal amount of 4¾% senior notes due 2023 that the exchanging holders are required to exchange on the settlement date, separate from the exchange offers, by about $50.6 million and (b) require the exchanging holders to tender into the exchange offers $10 million of 4 7/8% senior notes due 2020 and $51.25 million of 5½% senior notes due 2025, in each case other than existing notes that holders are required to exchange on the settlement date, separate from the exchange offers.

The incremental 2020 and 2025 notes were not entitled to the early participation premium.

The following amounts of existing notes that the exchanging holders were required to exchange on the settlement date due to the amendment are as follows, with the new exchange ratios listed per $1,000 principal amount of existing notes:

• $67.6 million of existing 4 7/8% notes due 2020 for a new exchange ratio of $850, with $57.4 million of new notes to be issued in exchange;

• $10 million of existing 4 7/8% notes due 2020 for a new exchange ratio of $800, with $8 million of new notes to be issued in exchange;

• $208.1 million of existing 4¾% notes due 2023 for a new exchange ratio of $370, with $77 million of new notes to be issued in exchange;

• $98.5 million of existing 5 5/8% notes due 2023 for a new exchange ratio of $425, with $41.9 million of new notes to be issued in exchange;

• $75.2 million of existing 5½% notes due 2025 for a new exchange ratio of $425, with $32 million of new notes to be issued in exchange; and

• $51.3 million of existing 5½% notes due 2025 for a new exchange ratio of $375, with $19.2 million of new notes to be issued in exchange.

In addition to the exchange consideration, holders who tendered their notes for exchange by the early exchange time will also receive an early participation premium of $50 per $1,000 principal amount.

In connection with the exchange offers, the issuers were also soliciting consents from holders of each series of the existing notes, other than the 4¾% notes due 2023, to amend the indentures governing each series to eliminate substantially all of the restrictive covenants, modify or eliminate some other provisions and waive some defaults and events of default, if any.

The consent of the holders of a majority of the aggregate principal amount of the existing notes outstanding of each series was required in order to effectuate the proposed amendments. By the expiration time, the company had not received the requisite consents from holders.

Settlement is expected on Dec. 6.

Eligible holders of existing notes could deliver their consent to the proposed amendments only by tendering existing notes. Eligible holders could not deliver a consent without tendering existing notes.

An eligible holder had to tender all of their existing notes in the exchange offers in order to participate in any exchange offer.

In the event that the amount of new notes issuable in respect of the existing non-2020 notes exceeded the cap, $355 million, but not exceed the cap if no existing 4¾% notes due 2023 were accepted, the issuers would accept existing 4¾% notes due 2023 that had been tendered on a pro rata basis.

In the event that the amount of new notes issuable in respect of the existing non-2020 notes would exceed the cap regardless of whether or not any existing 4¾% notes due 2023 were accepted, the issuers would not accept any existing 4¾% notes due 2023 and would accept all other existing non-2020 notes that have been tendered on a pro rata basis.

In addition to the exchange offers, Deerfield Partners, LP, Deerfield Special Situations Fund, LP and Deerfield Private Design Fund IV, LP as exchanging holders, collectively holding about $500 million, or 16.9%, of the existing notes, entered into an exchange agreement with the issuers.

The Deerfield exchanging holders agreed to exchange with the issuers on the settlement date, separate from the exchange offers, their existing notes for about $227 million of new notes.

D.F. King Co., Inc. (866 356-7814 toll free, 212 269-5550 for bankers and brokers or mnk@dfking.com) is the exchange agent and information agent.

Mallinckrodt is a Dublin-based pharmaceutical company with U.S. headquarters in St. Louis.

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