| Item 1.01 | Entry into a Material Definitive Agreement. |
On July 17, 2020, a wholly-owned subsidiary of Avantor, Inc. (the “Company”), Avantor Funding, Inc. (the “Issuer”), closed its previously announced offering (the “Offering”) of $1,550,000,000 aggregate principal amount of the Issuer’s 4.625% Senior Notes due 2028 (the “Dollar Notes”) and €400,000,000 aggregate principal amount of 3.875% Senior Notes due 2028 (the “Euro Notes” and, together with the Dollar Notes, the “Notes”). The Offering was made in a private transaction in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), in the United States only to persons reasonably believed to be “qualified institutional buyers,” as that term is defined in Rule 144A under the Securities Act, or outside the United States pursuant to Regulation S under the Securities Act.
The Notes were issued pursuant to an Indenture, dated as of July 17, 2020 (the “Indenture”), among the Issuer, the Guarantors (as defined below) and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”).
Interest on the Notes begins accruing on July 17, 2020, the issue date of the Notes. Interest on the Dollar Notes accrues at a rate of 4.625% per year, payable semi-annually in arrears on January 15 and July 15 of each year, commencing on January 15, 2021. Interest on the Euro Notes accrues at a rate of 3.875% per year, payable semi-annually in arrears on January 15 and July 15 of each year, commencing on January 15, 2021. The Notes mature on July 15, 2028.
The net proceeds of the offering, along with cash on hand, were used to redeem all of the Issuer’s outstanding 9.000% Senior Notes due 2025 (the “Existing Notes”) and to pay all fees and expenses related thereto.
Ranking; Guarantees
The Notes are senior unsecured obligations of the Issuer and rank equal in right of payment with all of the Issuer’s existing and future senior indebtedness and senior in right of payment to all of the Issuer’s existing and future subordinated indebtedness. The Notes are guaranteed on a joint and several unsecured basis by Vail Holdco Sub LLC, the Issuer’s direct parent and a direct wholly-owned subsidiary of the Company (“Holdings”), and each of Holdings’ wholly-owned domestic subsidiaries that guarantees obligations under the Issuer’s senior secured credit facilities (together with Holdings, the “Guarantors”). Such note guarantees rank equal in right of payment with all existing and future senior indebtedness of the Guarantors and senior in right of payment to all future subordinated indebtedness of the Guarantors. The Notes and the note guarantees are structurally subordinated to all of the existing and future indebtedness and other liabilities of any existing and future subsidiaries that do not guarantee the Notes.
Optional Redemption
The Issuer may, at its option, redeem the Dollar Notes, in whole or in part, at any time prior to July 15, 2023, at a price equal to 100% of the principal amount of the Dollar Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, plus the applicable “make-whole premium.” In addition, beginning on July 15, 2023, the Issuer may redeem all or a part of the Dollar Notes at a redemption price equal to 102.313% of the principal amount redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The redemption price decreases to 101.156% and 100.000% of the principal amount redeemed on July 15, 2024 and July 15, 2025, respectively. In addition, at any time prior to July 15, 2023, the Issuer may, at its option, redeem up to 40% of the aggregate principal amount of the Dollar Notes issued under the Indenture with the proceeds of certain equity offerings at a redemption price equal to (x) 104.625% of the aggregate principal amount of the Dollar Notes to be redeemed, with an amount equal to or less than the net cash proceeds from one or more equity offerings to the extent such net cash proceeds are received by or contributed to the Issuer, plus (y) accrued and unpaid interest to, but excluding, the redemption date.
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