Revlon, Inc. has announced the final results of its exchange offer and consent solicitation for its $342.8 million of 5.75% senior notes due 2021, saying that bonds not tendered into the exchange will be stripped of most of their covenants and then redeemed at par, enabling the company to avoid a possible bankruptcy filing. Revlon said that $236 million, or 68.8%, of the outstanding notes were tendered as of the exchange's Nov. 10 expiration date.
The company expects to settle the exchange offer on Nov. 13. It said it will optionally redeem the remaining $106.8 million in outstanding bonds, with accrued interest, on Dec. 14.
Revlon had warned in a Form NT 10-Q filing on Nov. 6 that the bonds must be repaid or refinanced in full before Nov. 16, which is 91 days before their maturity date. Under most circumstances, failure to repay or refinance the notes by that date would have triggered the acceleration of company loans under a 2016 asset-based revolving credit agreement, 2016 term credit agreement and 2018 foreign asset-based term facility. That acceleration would also have triggered cross defaults under other Revlon debt.
By eliminating, through the consent solicitation, substantially all restrictive covenants and certain events of default provisions on bonds not tendered, Revlon "does not expect that any bankruptcy or insolvency proceeding will be necessary." Because Revlon will give notice of — and deposit sufficient funds with the trustee to effect — the redemption, "the Notes and the Indenture will be considered discharged in full effective as of November 13, 2020."
In the exchange, first announced in September but modified in October, Revlon offered tendering noteholders $275 in cash for each $1,000 in senior notes tendered, plus a $50 early tender/consent fee; or $200 in cash (plus a $50 early tender/consent fee) for each $1,000 in senior notes tendered, plus $50 million in asset-based lending first-in, last-out term loans and $75 million in new BrandCo second-lien term loans, both allocated pro rata among tendering noteholders.
The 5.75% notes traded today in small odd lots in the high 80s and low 90s.
Revlon develops, manufactures, markets, distributes and sells beauty and personal care products worldwide. It is majority-owned by MacAndrews & Forbes.