Cenveo Announces Closing of its Exchange Offer and Related Debt Refinancing Transactions

Cenveo Corp., a Delaware corporation, announced that it closed on an exchange offer whereby approximately 80 percent of its outstanding 11.5 percent senior notes due 2017 were exchanged for newly issued 6.000 percent senior notes due 2024 and warrants to purchase shares of common stock, par value $0.01 per share, of Cenveo Inc., representing in the aggregate 16.6 percent of the outstanding common stock, at an exercise price of $1.50 per share, and related refinancing transactions. Cenveo Inc., a Colorado corporation, is a holding company and holds all of the capital stock of the company.

Robert Burton Sr., chairman and CEO, Cenveo Inc., released the following statement about the transaction:

We are delighted to have achieved these important milestones with our refinancing transactions. With the closing of the exchange offer and related transactions, and other signed transactions, Cenveo emerges a stronger company with lower debt, higher cash flow due to significantly lower interest expense, and no significant scheduled debt maturities until August 2019. We are confident that with our improved free cash flow and increased liquidity as a result of the new $50 million secured term note financing, we have sufficient cash to address the nearly $50 million of 11.5 percent notes and 7.0 percent exchangeable senior notes that remain outstanding following this closing. These financing transactions enable the company to continue to capitalize on its leadership position within its three business segments by significantly reducing the refinancing and disruption risk associated with the 2017 debt maturities. We are very excited about the future of our company and very appreciative of our longtime lenders who have supported us during these transactions.

On June 10, 2016, the closing date, the company retired approximately $150 million of its outstanding 11.5 percent notes in exchange for an aggregate of approximately $105 million of new notes and warrants to purchase approximately 11.1 million shares of common stock. For each $1,000 principal amount of 11.5 percent notes exchanged, the holder received $700 aggregate principal amount of new notes and warrants to purchase 74 shares of common stock. The retired 11.5 percent notes represented approximately 80 percent of all such notes outstanding at the commencement of the exchange offer. Approximately $38.5 million aggregate principal amount of the 11.5 percent notes remain outstanding.

Also on the closing date, in a related transaction, the company amended its asset-based revolving credit facility (the ABL Facility) to extend the term of the ABL Facility through 2021 and to reduce the commitments thereunder by $50 million to $190 million. The ABL Facility now matures in June 2021, with a springing maturity of May 2019 ahead of the company’s existing 6.000 percent senior priority secured notes due August 2019 in the event that more than $10.0 million of the 6.000 percent notes remain outstanding at such time.

Also on the closing date, in another related transaction, the company and certain affiliates of or funds managed by Allianz Global Investors U.S. LLC entered into a secured indenture and note purchase agreement pursuant to which the company issued new secured notes to the purchasers in an aggregate principal amount of $50.0 million, the proceeds of which have been applied to reduce the outstanding principal amount under the ABL Facility. The new secured notes mature in December 2021, with a springing maturity of May 2019 ahead of the company’s 6.000 percent notes. The new secured notes bear interest at 4 percent per annum and are secured by the same collateral that secures the ABL Facility, the 6.000 percent notes and the company’s 8.500 percent junior priority secured notes due 2022. With respect to the ABL Facility, the new secured notes rank junior with respect to all collateral up to a certain maximum principal amount of the ABL Facility. With respect to the 6.000 percent notes, the new secured notes rank junior with respect to notes priority collateral and senior with respect to ABL Facility priority collateral. With respect to the 8.500 percent notes, the new secured notes rank senior with respect to all collateral. Such ranking of the new secured notes with respect to the 6.000 percent notes and the 8.500 percent notes is the same ranking that the ABL Facility has with such notes.

In addition, as previously disclosed, the company and Allianz have agreed to enter into a note purchase agreement pursuant to which the company shall purchase all of its 7 percent exchangeable senior notes owned by Allianz in the aggregate principal amount of $37,545,000 in exchange for: (a) payment in cash in an amount equal to (i) the aggregate principal amount of such 7 percent notes multiplied by 0.6 plus (ii) an amount of interest on the amount payable pursuant to the immediately preceding clause (i) at an annual interest rate of 7 percent per annum, such interest accruing from the date of execution of such note purchase agreement until (and including) the closing of the purchase and computed based on a year of 360 days; (b) payment in cash of interest that shall have accrued in respect of such 7 percent notes in accordance with the indenture relating to such 7 percent notes, but remains unpaid at the closing of the purchase; and (c) delivery to Allianz of Warrants to purchase 3.3 percent of the outstanding shares of the common stock as of the closing date. The consummation of the 7 percent notes purchase may occur in one or multiple closings on or prior to Jan. 31, 2017 and are subject to customary conditions precedent. As a result of the 7 percent notes sale, only approximately $11.2 million aggregate principal amount of 7 percent notes will remain outstanding.

The new notes, the warrants and the shares of common stock underlying the warrants and the offering thereof have not been registered under the Securities Act or under any state securities laws. The new notes, the warrants and the shares of common stock underlying the warrants may not be offered or sold within the U.S., absent registration or an applicable exemption from registration requirements. On the closing date, the company executed a registration rights agreement pursuant to which the company will file a registration statement covering the resale of the warrants and the shares of common stock issuable upon exercise of the warrants.

To view the complete report, visit www.cenveo.com.