WESTBURY, N.Y., Oct. 9, 2024 /PRNewswire/ -- P & L Development Holdings, LLC ("PLD" or the "Company") today announced that certain of its subsidiaries have commenced an offer to exchange (the "Exchange Offer") up to $350,000,000 aggregate principal amount of the outstanding 7.750% Senior Secured Notes due 2025 (the "Old Notes") issued by P & L Development, LLC, a Delaware limited liability company (the "Issuer") and PLD Finance Corp., a Delaware corporation (together with the Issuer, the "Issuers") into new PIK Toggle Senior Secured Notes due 2029 (the "New Notes") to be issued by the same Issuers. Any capitalized terms used in this press release without definition have the respective meanings assigned to such terms in the Offering Memorandum (as defined below).

This Exchange Offer is being made upon the terms and conditions set forth in the Confidential Offering Memorandum and Consent Solicitation Statement (the "Offering Memorandum") dated October 9, 2024. The Exchange Offer will expire at 5:00 p.m., New York City time, on November 7, 2024 (the "Expiration Time"), subject to being amended or extended. Tendered Old Notes may be validly withdrawn at any time prior to 5:00 p.m., New York City time, on October 23, 2024, but not thereafter.

The maximum aggregate principal amount of Old Notes to be accepted for exchange in the Exchange Offer is $350,000,000 (subject to the Issuers' right to increase such amount, the "Maximum Amount"). The Issuers reserve the right, but are under no obligation, to increase the Maximum Amount at any time prior to the Expiration Time, and may do so without any extension of the Withdrawal Deadline. In the event that the Issuers increase the Maximum Amount, the Company will not be required to provide withdrawal rights after the Withdrawal Deadline. In the event that the amount of Old Notes tendered exceeds the Maximum Amount, the amount of Old Notes accepted for exchange will be prorated as further described in the Offering Memorandum.

For each $1,000 principal amount of Old Notes validly tendered prior to 5:00 pm, New York City time, on October 23, 2024 (the "Early Tender Time"), holders will be eligible to receive $1,053 principal amount of New Notes (the "Total Consideration") as set forth in the chart below. Holders who tender Old Notes after the Early Tender Time will only be eligible to receive $1,000 principal amount of New Notes per $1,000 principal amount of Old Notes (the "Late Consideration"). Subject to certain terms and conditions, with respect to the Exchange Offer, the payment of the Total Consideration will occur as soon as practicable following the Early Tender Time and is expected to be on or about three business days after the Early Tender Time (the "Initial Settlement Date"). Subject to certain terms and conditions, with respect to the Exchange Offer, the payment of the Late Consideration will occur as soon as practicable following the Expiration Time and is expected to be on or about three business days after the Expiration Time (the "Final Settlement Date"). The New Notes will be issued in minimum denominations of $1.00 and thereafter in integral multiples of $1.00 thereof.

Interest on the New Notes will accrue from the date of first issuance of New Notes. Prior to November 15, 2026, the Issuers may, at their option, elect to pay interest on the then outstanding principal amount of the New Notes either (a) entirely in cash at a rate of 12.000% per annum or (b) at a rate of 9.000% per annum in cash and 3.500% per annum by increasing the principal amount of the outstanding New Notes or by issuing additional New Notes under the indenture governing the New Notes having the same terms as the New Notes offered hereby in a principal amount of such interest payment on each such interest payment date. On and after November 15, 2026, interest on the then outstanding principal amount of New Notes will continue to accrue at a rate of 12.000% per annum and be payable solely in cash. The New Notes will mature on May 15, 2029.

The consummation of the Exchange Offer is conditioned upon, among other things, the valid tender, and not valid withdrawal, of at least 66.67% in aggregate principal amount of outstanding Old Notes (excluding Old Notes held by the Issuers or any of their respective affiliates) (the "Minimum Tender Condition"). By tendering the Old Notes, each holder acknowledges and consents to the right of the Issuers and the Ad Hoc Group and Supporting Holders (as defined below), to mutually agree to waive or amend the Minimum Tender Condition independent of any level of participation. In connection with the Exchange Offer, the Issuers are seeking consents to the Proposed Amendments (as defined below) from registered holders of the Old Notes.

In the event that the Minimum Tender Condition is satisfied and the Old Notes tendered in the Exchange Offer do not exceed the Maximum Amount (the "Guarantee and Collateral Release Scenario"), the Proposed Amendments will, among other things, eliminate certain provisions containing the restrictive covenants and events of default for the Old Notes  and to release the guarantees of the Old Notes and the collateral securing the Old Notes.

In the event that (i) the Minimum Tender Condition is not satisfied but consents from holders of at least 50.1% of the outstanding principal amount of Old Notes are received and the Issuers and the Ad Hoc Group and Supporting Holders waive the Minimum Tender Condition or (ii) the Minimum Tender Condition is satisfied but the Old Notes tendered in the Exchange Offer exceed the Maximum Amount (either such scenario, the "Alternative Scenario"), the Proposed Amendments will instead amend the definition of "Permitted Liens" and certain related definitions in the Old Notes Indenture as further described in the Offering Memorandum.

The proposed amendments described above (such proposed amendments, the "Proposed Amendments"), as applicable, will be set forth in a supplemental indenture to the indenture governing the Old Notes (the "Supplemental Indenture"). The Supplemental Indenture, by its terms, will provide that the Proposed Amendments will only become operative so long as the terms of the Guarantee and Collateral Release Scenario or the Alternative Scenario, as applicable, are met.

Holders may not tender their Old Notes pursuant to the Exchange Offer without delivering a consent with respect to such Old Notes tendered pursuant to the Consent Solicitation, and holders may not deliver their consents pursuant to the Consent Solicitation without tendering the related Old Notes pursuant to the Exchange Offer. Further, each holder acknowledges and agrees that depending on the amount of Old Notes accepted in the Exchange, the Proposed Amendments may or may not become operative as described above. No consideration will be paid for consents in the Consent Solicitation.

As of the date hereof, certain holders of Old Notes and their respective affiliates, who together hold approximately 63% of the outstanding principal amount of the Old Notes (excluding Old Notes held by the Issuers or any of their respective affiliates) (the "Ad Hoc Group and Supporting Holders"), have executed a support agreement with the Issuers, pursuant to which such holders have agreed to tender all of their Old Notes and deliver their consents in this Exchange Offer and Consent Solicitation.

The Exchange Offer is subject to customary closing conditions, including, among other things, the Minimum Tender Condition, the amendment to the Company's ABL Facility, and the absence of any proceeding, event, condition, or legal impediment that could prohibit or delay the Exchange Offer from being consummated or impair the anticipated benefits of the Exchange Offer. For further information, please refer to "Conditions to the Exchange Offer and the Consent Solicitation" in the Offering Memorandum.

The New Notes will be guaranteed on the same basis and by the same guarantors that currently guarantee the Old Notes, including the Company and by the Issuers' existing subsidiaries and future domestic subsidiaries (together with the Company, the "Guarantors") that guarantee the obligations under the Company's senior secured asset-based revolving loan and security agreement entered into by the Company, the Issuer and certain of the Issuer's subsidiaries with Bank of America, N.A. as agent and lender (the "ABL Facility") or certain other indebtedness, subject to certain exceptions. The New Notes and related guarantees will be secured by the same assets and on the same basis as the existing collateral securing  the Old Notes, namely, by (i) a second-priority lien on the Issuers' and Guarantors' existing and future assets that secure or will secure the ABL Facility on a first lien basis (the "ABL Priority Collateral") and (ii) a first-priority lien on substantially all of the Issuers' and the Guarantors' other existing and future assets (the "Fixed Asset Priority Collateral"), subject to certain exclusions and permitted liens. In addition, after giving effect to the Rogue Contribution (as defined below) on or prior to the issue date of the New Notes, the Fixed Asset Priority Collateral will include the Rogue Royalties (as defined below), subject to customary intercreditor agreements.

On or prior to the issue date of the New Notes, P&L Global Holding Corp. will assign to the Issuer its rights to future royalty streams (the "Rogues Royalties") under a royalty agreement, dated as of August 14, 2024, between Rogue Holdings, LLC, Swisher Rogue Holdings, LLC, P&L Global Holding Corp. and PLD Acquisitions LLC, derived from future sales of certain modern oral nicotine products, including pouches, gum, lozenges, and tablets products (the "Royalty Contribution").

The New Notes and related guarantees will rank (i) equally in right of payment with all of the Issuers' and Guarantors' existing and future senior indebtedness (including the ABL Facility and the Old Notes, to the extent outstanding following the completion of the Exchange Offer), (ii) senior in right of payment to all of the Issuers' and Guarantors' existing and future subordinated indebtedness, (iii) effectively senior to all of the Issuers' existing and future unsecured indebtedness to the extent of the value of the collateral (including the Old Notes, to the extent outstanding following the completion of the Exchange Offer under the Guarantee and Collateral Release Scenario), (iv) effectively senior to the ABL Facility to the extent of the value of the Fixed Asset Priority Collateral (including the Additional Collateral), (v) effectively junior to the ABL Facility to the extent of the value of the ABL Priority Collateral, (vi) structurally senior to the Issuers' existing and future indebtedness that is not guaranteed by the Guarantors to the extent of the value of the guarantees of the New Notes by the Guarantors and (vii) structurally subordinated to all obligations of each of the Issuers' subsidiaries that is not a Guarantor of the New Notes.

We have entered into a commitment letter on the date hereof with certain holders of the Old Notes pursuant to which we have agreed to issue and sell and such holders have agreed to purchase in a private transaction, additional New Notes in an aggregate principal amount between $121.7 million and $179.7 million (the "Concurrent Financing"). The proceeds from the Concurrent Financing will be used to repay any amounts of Old Notes outstanding following the consummation of the Exchange Offer. The holders' commitment to purchase the additional New Notes is subject to customary conditions, including the accuracy of certain representations and warranties, no event of default and the consummation of the amendment to the ABL Credit Agreement. The foregoing description of the Concurrent Financing is subject to the negotiation and finalization of, and therefore qualified in its entirety by the definitive documentation related thereto.

The Confidential Offering Memorandum will only be distributed to eligible holders of Old Notes who complete and return an eligibility form confirming that they are a "qualified institutional buyer" under Rule 144A of the Securities Act of 1933, as amended (the "Securities Act") or not a "U.S. person" under Regulation S of the Securities Act or an "accredited investor" under Regulation D of the Securities Act for purposes of applicable securities laws. Noteholders who desire to complete an eligibility form should either visit the website for this purpose at http://www.dfking.com/PLD or request instructions by sending an e-mail to PLD@dfking.com or calling D. F. King & Co., Inc., the information agent for the Exchange Offer, at (888) 644-6071(U.S. Toll-free) or (212) 269-5550 (Collect).

The New Notes will not be registered under the Securities Act, or any other applicable securities laws and, unless so registered, the New Notes may not be offered, sold, pledged or otherwise transferred within the United States or to or for the account of any U.S. person, except pursuant to an exemption from the registration requirements thereof. Accordingly, the New Notes are being offered and issued only (i) to persons reasonably believed to be "qualified institutional buyers" (as defined under Rule 144A of the Securities Act), (ii) to non-"U.S. persons" who are outside the United States (as defined under Regulation S of the Securities Act) and (iii) to "institutional accredited investors" (as defined under Regulation D of the Securities Act). Non U.S.-persons may also be subject to additional eligibility criteria.

The complete terms and conditions of the Exchange Offer are set forth in the informational documents relating to the Exchange Offer. This press release is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell the New Notes. The Exchange Offer is only being made pursuant to the Offering Memorandum. The Exchange Offer is not being made to holders in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.

Any statements made in this press release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies. These statements often include words such as "anticipate," "expect," "suggests," "plan," "believe," "intend," "estimates," "targets," "projects," "should," "could," "would," "may," "will," "forecast" and other similar expressions. We base these forward-looking statements or projections on our current expectations, plans and assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances and at such time. As you read and consider this press release, you should understand that these statements are not guarantees of performance or results. The forward-looking statements and projections are subject to and involve risks, uncertainties and assumptions and you should not place undue reliance on these forward-looking statements or projections. Although we believe that these forward-looking statements and projections are based on reasonable assumptions at the time they are made, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those expressed in the forward-looking statements and projections. These cautionary statements should not be construed by you to be exhaustive and are made only as of the date of this press release. All forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by law.

PL Developments is a leading manufacturer, packager and distributor of pharmaceutical and consumer healthcare products.

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SOURCE P & L Developments Holdings, LLC