GrafTech International Initiates Exchange Offers and Consent Solicitations for Existing Notes
GrafTech International Ltd. (NYSE: EAF) (“GrafTech” or the “Company”) has announced that its subsidiaries, GrafTech Finance Inc. (“GrafTech Finance”) and GrafTech Global Enterprises Inc. (“GrafTech Global”), have launched separate exchange offers (“Exchange Offers”). These offers aim to exchange any and all of the following:
- GrafTech Finance’s 4.625% Senior Secured Notes due 2028 (“Existing 4.625% Notes”)
- GrafTech Global’s 9.875% Senior Secured Notes due 2028 (“Existing 9.875% Notes”)
The new offerings comprise up to $500 million in aggregate principal of 4.625% second lien notes due 2029 and up to $450 million in aggregate principal of 9.875% second lien notes due 2029 (“Exchange Notes”). The Exchange Offers are detailed in a confidential exchange offer memorandum and consent solicitation statement (“Offering Memorandum”), subject to terms and conditions outlined therein.
Consent Solicitations for Amendments
In tandem with the Exchange Offers, GrafTech is soliciting consents (“Consent Solicitations”) from holders of the Existing Notes to amend the governing indentures (“Existing Notes Indentures”). The proposed amendments seek to:
- Eliminate most restrictive covenants.
- Remove certain default events and associated provisions.
- Release the collateral securing the Existing Notes upon receiving consent from at least 66 2/3% of noteholders.
To effect these amendments, a majority of noteholders must provide consent (“Requisite Consents”). Eligible holders cannot tender notes without providing consents, nor provide consents without tendering their notes.
Support from Major Noteholders
Significant support has already been secured, with holders of approximately 89% of the Existing 4.625% Notes and 72% of the Existing 9.875% Notes agreeing to participate. This ensures that the necessary consents for amendments and collateral release are likely to be obtained.
Exchange Offer Terms
Details of the exchange consideration for every $1,000 principal amount of tendered notes include:
| Title of Notes | Issuer | Outstanding Principal Amount | Consideration |
|---|---|---|---|
| 4.625% Senior Secured Notes | GrafTech Finance | $500,000,000 | $1,000 in new 4.625% Notes |
| 9.875% Senior Secured Notes | GrafTech Global | $450,000,000 | $1,000 in new 9.875% Notes |
Interest accrued on the Existing Notes will be paid in cash up to, but not including, the settlement date. The new 4.625% Notes and 9.875% Notes will accrue interest starting from their issuance date, payable semi-annually beginning June 23, 2025.
Guarantees and Security Provisions
The New Notes will be guaranteed by the same entities backing the Existing Notes, including additional guarantors outside the U.S. They will also hold a second-priority security interest in the collateral securing the Issuers and guarantors, with certain enforcement limitations.
Key Dates and Conditions
- Expiration Time: 5:00 PM (NYC time), December 20, 2024, unless extended.
- Withdrawal Deadline: Same as Expiration Time, subject to limited exceptions.
The Exchange Offers and Consent Solicitations are contingent upon satisfying various conditions, including a minimum tender of 80% of the aggregate outstanding principal of Existing Notes. Each offer and solicitation can be individually extended, amended, or terminated without affecting the others.
Eligibility and Participation
The offers are open exclusively to “Eligible Holders,” including:
- Qualified institutional buyers under Rule 144A.
- Non-U.S. persons in compliance with Regulation S.
- Canadian residents of Ontario, Quebec, or Alberta who qualify as both “accredited investors” and “permitted clients.”
Eligible Holders can confirm their eligibility at https://epiqworkflow.com/cases/GrafTechEL.
Important Disclaimers
This announcement does not constitute an offer to sell or solicitation to buy securities in jurisdictions where such activity is unlawful. The New Notes are not registered under the Securities Act and cannot be sold in the U.S. without an applicable exemption.
GrafTech urges noteholders to review the Offering Memorandum thoroughly for full details. Requests for eligibility documentation can be directed to Epiq Corporate Restructuring, LLC, the exchange agent and information agent, via email at [email protected].
No Recommendation
Neither GrafTech nor its affiliates make any recommendations regarding participation in the Exchange Offers or Consent Solicitations.
