Item 1.01 Entry into a Material Definitive Agreement
On June 18, 2020, R. R. Donnelley & Sons Company (the “Company”) entered into an Indenture, dated as of June 18, 2020 (the “New Notes Base Indenture”), between the Company and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated as of June 18, 2020 (the “New Notes Supplemental Indenture” and, together with the New Notes Base Indenture, the “New Notes Indenture”), between the Company and the Trustee, governing the Company’s $244,949,000 8.250% Senior Notes due 2027 (the “New Notes”). The Company did not receive any proceeds from the issuance of the New Notes.
The New Notes were issued in connection with the Company’s previously announced offer to exchange (the “Exchange Offers”) up to $300 million of New Notes for certain of its outstanding debt securities (the “Old Notes”) pursuant to the terms and conditions set forth in the Company’s prospectus, dated June 16, 2020, filed with the Securities and Exchange Commission (the “SEC”) on June 16, 2020.
The New Notes are senior unsecured obligations of the Company and are not guaranteed. The New Notes rank equally with the Company’s other unsecured and unsubordinated debt obligations. Interest is payable on the New Notes semi-annually in arrears at an annual rate of 8.250%, on January 1 and July 1 of each year, beginning on January 1, 2021. The New Notes will mature on July 1, 2027.
At any time prior to July 1, 2023, the Company may redeem some or all of the New Notes at a price equal to 100% of the principal amount to be redeemed, plus a “make-whole” premium and accrued and unpaid interest, if any, to, but not including, the redemption date. At any time on or after July 1, 2023, the Company may redeem some or all of the New Notes at the following redemption prices during the12-month period after July 1 of the relevant year, plus accrued and unpaid interest, if any, to, but not including, the redemption date: 2023 (106.188%), 2024 (104.125%), 2025 (102.063%) and 2026 (100.000%).
The New Notes Indenture contains covenants, subject to customary exceptions and qualifications, that limit the ability of the Company and its restricted subsidiaries to, among other things:
| | • | | enter into sale and leaseback transactions; and |
| | • | | consolidate, merge, sell or otherwise dispose of all or substantially all of the Company’s assets. |
In addition, if, on or following the issue date of the New Notes, any indebtedness of the Company and/or any “restricted subsidiary” (as defined in the Company’s term loan facility) with an outstanding aggregate principal amount in excess of $10.0 million is secured on a junior lien basis to the Company’s term loan facility or asset based lending credit facility, then within 15 business days of the provision of such security, the Company will be required to cause the New Notes to be secured on an equal and ratable basis with such indebtedness for so long as such indebtedness is so secured.
The New Notes Indenture also provides for customary events of default for issuances of this type.
In conjunction with the Exchange Offers, the Company solicited consents (the “Consent Solicitations”) from holders of each series of Old Notes (“Consents”) to certain proposed amendments to each indenture governing the Old Notes to eliminate substantially all of the restrictive covenants, modify covenants regarding mergers and consolidations, eliminate certain events of default, and modify or eliminate certain other provisions contained therein (the “Proposed Amendments”). The Company received the requisite Consents from holders of the Company’s 6.500% Senior Notes due 2023 (the “Old 2023 Notes”).
On June 18, 2020, the Company entered into an Eleventh Supplemental Indenture, dated as of June 18, 2020 (the “Old 2023 Notes Supplemental Indenture”), to the Indenture, dated as of January 3, 2007, between the Company and Wells Fargo Bank, National Association (as successor to LaSalle Bank National Association), as amended by the
