|
Item 1.01.
|
Entry into a Material Definitive Agreement.
|
Issuance of Senior Notes
On June 16, 2020, in connection with the settlement of the Exchange Offers and Consent Solicitations (as further described in Item 8.01 to this Current Report), certain wholly-owned subsidiaries of Endo International plc (“Endo International” and, together with its subsidiaries, the “Company”) issued the First Lien Notes, the Second Lien Notes and the Unsecured Notes, each as further described below. The First Lien Notes, the Second Lien Notes and the Unsecured Notes were each issued in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), to qualified institutional buyers in accordance with Rule 144A under the Securities Act and to persons outside of the United States pursuant to Regulation S under the Securities Act.
Additional Issuance of 7.500% Senior Secured Notes due 2027
Par Pharmaceutical, Inc. (“PPI”) issued an additional $515,479,000 aggregate principal amount (the “Additional First Lien Notes”) of PPI’s existing 7.500% Senior Secured Notes due 2027 (the “Existing First Lien Notes” and, together with the Additional First Lien Notes, the “First Lien Notes”) pursuant to a supplemental indenture, dated as of June 16, 2020 (the “First Lien Supplemental Indenture”), by and among PPI, the guarantors named therein (the “Guarantors”) and Wells Fargo Bank, National Association, as trustee (the “Trustee”), to that certain indenture, dated as of March 28, 2019 (the “First Lien Indenture”), by and among PPI, the Guarantors and the Trustee.
The Additional First Lien Notes have the same terms as the Existing First Lien Notes (other than the issue date and initial interest payment date, which will be October 1, 2020) and are also senior secured obligations of PPI that are (i) guaranteed on a senior secured basis by Endo International and certain of its subsidiaries that also guarantee the obligations under the Company’s existing Credit Agreement, dated as of April 27, 2017 (the “2017 Credit Agreement”), among Endo International, certain of its subsidiaries as borrowers (the “Borrowers”), the lenders party thereto and JPMorgan Chase Bank, N.A, as administrative agent (the “Administrative Agent”), and (ii) secured by first priority liens on the same collateral (the “Collateral”) that secures the obligations under the 2017 Credit Agreement and the Company’s existing senior secured notes in accordance with the terms of the First Lien Indenture and that certain collateral trust agreement, dated as of April 27, 2017 (the “First Lien Collateral Trust Agreement”), among Endo International, the Borrowers, PPI, certain other grantors party thereto, the Administrative Agent, the Trustee and Wilmington Trust, National Association, as first lien collateral trustee (the “First Lien Collateral Trustee”). The First Lien Collateral Trust Agreement sets forth therein the relative rights of the first lien secured parties with respect to the Collateral and covers certain other matters relating to the administration of security interests. The First Lien Collateral Trust Agreement governs substantially all matters related to the Collateral, including with respect to directing the First Lien Collateral Trustee, the distribution of proceeds and enforcement.
The First Lien Notes are also subject to the terms of an intercreditor agreement, dated as of June 16, 2020 (the “Intercreditor Agreement”), among Wilmington Trust, National Association, as first priority representative, Wilmington Trust, National Association, as second priority representative, and certain grantors party thereto, that governs the relative rights of the first lien secured parties, on the one hand, and the second lien secured parties (including the holders of the Second Lien Notes (described below) and any other future second lien indebtedness), on the other hand. The Intercreditor Agreement provides, subject to certain exceptions, that the First Lien Collateral Trustee will have the exclusive right to exercise rights and remedies with respect to the Collateral on behalf of the holders of the First Lien Notes and the other first lien indebtedness.
The First Lien Notes bear interest at a rate of 7.500% per year, accruing from the last date interest was paid on the Existing First Lien Notes. Interest on the First Lien Notes is payable semiannually in arrears on April 1 and October 1 of each year, beginning on October 1, 2020. The First Lien Notes will mature on April 1, 2027, subject to earlier repurchase or redemption in accordance with the terms of the First Lien Indenture.
PPI may redeem some or all of the First Lien Notes at any time prior to April 1, 2022 at a price equal to 100% of the principal amount of the First Lien Notes redeemed plus accrued and unpaid interest, if any, to, but not including, the redemption date and a make-whole premium set forth in the First Lien Indenture. On or after April 1, 2022, PPI may redeem some or all of the First Lien Notes at any time at redemption prices set forth in the First Lien Indenture, plus accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, at any time prior to April 1, 2022, PPI may redeem up to 35% of the aggregate principal amount of the First Lien Notes at a specified redemption price set forth in the First Lien Indenture plus accrued and unpaid interest, if any, to, but not including, the redemption date, with the net cash proceeds of specified equity offerings. If Endo International experiences certain change of control events, PPI must offer to repurchase the First Lien Notes at 101% of their principal amount, plus accrued and unpaid interest, if any, to, but not including, the repurchase date.
The foregoing summary of the First Lien Indenture, the First Lien Supplemental Indenture, the First Lien Notes, the First Lien Collateral Trust Agreement and the Intercreditor Agreement does not purport to be complete and is qualified in its entirety by reference to the complete terms of the First Lien Indenture, the First Lien Supplemental Indenture, the First Lien Notes, the First Lien Collateral Trust Agreement and the Intercreditor Agreement, copies of which are filed with this Current Report on Form 8-K as Exhibits 4.1, 4.2, 4.3, 10.1 and 10.3, respectively, and are incorporated herein by reference.
Issuance of 9.500% Senior Secured Notes due 2027
Endo Designated Activity Company (“Endo DAC”), Endo Finance LLC (“Endo Finance”) and Endo Finco Inc. (“Endo Finco” and, collectively with Endo DAC and Endo Finance, the “Co-Issuers” and, together with PPI, the “Issuers”) issued $940,590,000 aggregate principal amount of 9.500% Senior Secured Notes due 2027 (the “Second Lien Notes”) pursuant to an indenture, dated as of June 16, 2020 (the “Second Lien Indenture”), among the Co-Issuers, the Guarantors and the Trustee.
The Second Lien Notes are senior secured obligations of the Co-Issuers and are (i) guaranteed by Endo International and certain of its subsidiaries that also guarantee the obligations under the 2017 Credit Agreement and (ii) secured by second-priority liens on the Collateral in accordance with the terms of the Second Lien Indenture and that certain collateral trust agreement, dated as of June 16, 2020 (the “Second Lien Collateral Trust Agreement”), among Endo International, the Borrowers, the Co-Issuers, certain other grantors party thereto, the Administrative Agent, the Trustee and Wilmington Trust, National Association, as second lien collateral trustee (the “Second Lien Collateral Trustee”). The Second Lien Collateral Trust Agreement sets forth therein the relative rights of the second-lien secured parties with respect to the Collateral and covers certain other matters relating to the administration of security interests. The Second Lien Collateral Trust Agreement governs substantially all matters related to the interest of the second-lien secured parties in the Collateral, including with respect to directing the Second Lien Collateral Trustee, the distribution of proceeds and enforcement. The Second Lien Notes are also subject to the terms of the Intercreditor Agreement described above.
The Second Lien Notes bear interest at a rate of 9.500% per year, accruing from June 16, 2020. Interest on the Second Lien Notes is payable semiannually in arrears on January 31 and July 31 of each year, beginning on January 31, 2021. The Second Lien Notes will mature on July 31, 2027, subject to earlier repurchase or redemption in accordance with the terms of the Second Lien Indenture.
The Co-Issuers may redeem some or all of the Second Lien Notes at any time prior to July 31, 2023 at a price equal to 100% of the principal amount of the Second Lien Notes redeemed plus accrued and unpaid interest, if any, to, but not including, the redemption date and a make-whole premium set forth in the Second Lien Indenture. On or after July 31, 2023, the Co-Issuers may redeem some or all of the Second Lien Notes at any time at redemption prices set forth in the Second Lien Indenture, plus accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, at any time prior to July 31, 2023, the Co-Issuers may redeem up to 40% of the aggregate principal amount of the Second Lien Notes at a specified redemption price set forth in the Second Lien Indenture plus accrued and unpaid interest, if any, to, but not including, the redemption date, with the net cash proceeds of specified equity offerings. If Endo International experiences certain change of control events, the Co-Issuers must offer to repurchase the Second Lien Notes at 101% of their principal amount, plus accrued and unpaid interest, if any, to, but not including, the repurchase date.
The Second Lien Indenture contains covenants that, among other things, restrict the Co-Issuers’ ability and the ability of Endo International and its restricted subsidiaries to incur certain additional indebtedness and issue preferred stock, make certain dividend payments, distributions, investments and other restricted payments, sell certain assets, agree to any restrictions on the ability of their restricted subsidiaries to make payments to Endo International, create certain liens, merge, consolidate or sell all or substantially all of their assets and enter into certain transactions with affiliates. These covenants are subject to a number of important exceptions and qualifications, including the fall away or revision of certain of these covenants upon the Second Lien Notes receiving investment grade credit ratings.
The foregoing summary of the Second Lien Indenture, the Second Lien Notes and the Second Lien Collateral Trust Agreement does not purport to be complete and is qualified in its entirety by reference to the complete terms of the Second Lien Indenture, the Second Lien Notes and the Second Lien Collateral Trust Agreement, copies of which are filed with this Current Report on Form 8-K as Exhibits 4.4, 4.5 and 10.2, respectively, and are incorporated herein by reference.
Issuance of 6.000% Senior Notes due 2028
The Co-Issuers issued $1,260,416,000 aggregate principal amount of 6.000% Senior Notes due 2028 (the “Unsecured Notes,” and together with the First Lien Notes and the Second Lien Notes, the “New Notes”) pursuant to an indenture, dated as of June 16, 2020 (the “Unsecured Indenture”), among the Co-Issuers, the Guarantors and the Trustee.
The Unsecured Notes are senior unsecured obligations of the Co-Issuers and are unconditionally guaranteed by Endo International and certain of its subsidiaries that also guarantee the obligations under the 2017 Credit Agreement.
The Unsecured Notes bear interest at a rate of 6.000% per year, accruing from June 16, 2020. Interest on the Unsecured Notes is payable semiannually in arrears on June 30 and December 30 of each year, beginning on December 30, 2020. The Unsecured Notes will mature on June 30, 2028, subject to earlier repurchase or redemption in accordance with the terms of the Unsecured Indenture.
The Co-Issuers may redeem some or all of the Unsecured Notes at any time prior to June 30, 2023 at a price equal to 100% of the principal amount of the Unsecured Notes redeemed plus accrued and unpaid interest, if any, to, but not including, the redemption date and a make-whole premium set forth in the Unsecured Indenture. On or after June 30, 2023, the Co-Issuers may redeem some or all of the Unsecured Notes at any time at redemption prices set forth in the Unsecured Indenture, plus accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, at any time prior to June 30, 2023, the Co-Issuers may redeem up to 40% of the aggregate principal amount of the Unsecured Notes at a specified redemption price set forth in the Unsecured Indenture plus accrued and unpaid interest, if any, to, but not including, the redemption date, with the net cash proceeds of specified equity offerings. If Endo International experiences certain change of control events, the Co-Issuers must offer to repurchase the Unsecured Notes at 101% of their principal amount, plus accrued and unpaid interest, if any, to, but not including, the repurchase date.
The Unsecured Indenture contains covenants that, among other things, restrict the Co-Issuers’ ability and the ability of Endo International and its restricted subsidiaries to incur certain additional indebtedness and issue preferred stock, make certain dividend payments, distributions, investments and other restricted payments, sell certain assets, agree to any restrictions on the ability of their restricted subsidiaries to make payments to Endo International, create certain liens, merge, consolidate or sell all or substantially all of their assets and enter into certain transactions with affiliates. These covenants are subject to a number of important exceptions and qualifications, including the fall away or revision of certain of these covenants upon the Unsecured Notes receiving investment grade credit ratings.
The foregoing summary of the Unsecured Indenture and the Unsecured Notes does not purport to be complete and is qualified in its entirety by reference to the complete terms of the Unsecured Indenture and the Unsecured Notes, copies of which are filed with this Current Report on Form 8-K as Exhibits 4.6 and 4.7, respectively, and are incorporated herein by reference.
Consent Solicitation – Supplemental Indentures
In connection with the Exchange Offers and Consent Solicitations, the Issuers solicited the consent of the holders of each series of the Old Notes (as defined below) to, among other things, eliminate most of the restrictive covenants, certain of the affirmative covenants and certain of the events of default contained each of the Existing Indentures (as defined below) (collectively, the “Proposed Amendments”). The Issuers received the requisite consents from holders of each series of Old Notes on or prior to the expiration date of the Exchange Offers and Consent Solicitations and, accordingly, have entered into the following supplemental indentures:
|
|
(i)
|
supplemental indenture, dated as of May 28, 2020 (the “6.000% 2023 Supplemental Indenture”), by and among the Co-Issuers, the Guarantors and the Trustee, to that certain indenture, dated as of July 9, 2015 (as supplemented to date, the “6.000% 2023 Indenture”), by and among the Co-Issuers, the Guarantors and the Trustee, governing the Co-Issuer’s 6.000% Senior Notes due 2023 (the “6.000% 2023 Notes”);
|
|
|
(ii)
|
supplemental indenture, dated as of May 28, 2020 (the “6.000% 2025 Supplemental Indenture”), by and among the Co-Issuers, the Guarantors and the Trustee, to that certain indenture, dated as of January 27, 2015 (as supplemented to date, the “6.000% 2025 Indenture”), by and among the Co-Issuers, the Guarantors and the Trustee, governing the Co-Issuer’s 6.000% Senior Notes due 2025 (the “6.000% 2025 Notes”); and
|
|
|
(iii)
|
supplemental indenture, dated as of June 4, 2020 (the “5.375% 2023 Supplemental Indenture,” and together with the 6.000% 2023 Supplemental Indenture and the 6.000% 2025 Supplemental Indenture, the “Consent Supplemental Indentures”), by and among Endo Finance, Endo Finco, the Guarantors and the Trustee, to that certain indenture, dated as of June 30, 2014 (as supplemented to date, the “5.375% 2023 Indenture”), by and among Endo Finance, Endo Finco, the Guarantors and the Trustee, governing Endo Finance and Endo Finco’s 5.375% Senior Notes due 2023 (the “5.375% 2023 Notes”).
|