GLT 4.750 11/15/2029

Glatfelter Corp

Credit, Healthcare


Publicly traded companies mentioned herein: Berry Global Group Inc (BERY), Glatfelter Corp (GLT)

Highlights

The presenter is long Glatfelter Corp (GLT)’s only unsecured bond, the 2029 4.75% security with $500MM outstanding. GLT is merging with BERY’s Health, Hygiene and Specialties (HHS) segment, which is a larger business ($2.2B revenue, $290MM EBITDA) than the legacy GLT ($1.4B revenue, $90MM EBITDA), and management expects synergies on the combined $3.6B of revenue to drive pro forma EBITDA to $455MM. Since GLT’s $800MM of net debt massively exceeds its $80MM market cap, the company will own 10% of the NewCo equity, while BERY will own the other 90% and receive a $1B special dividend as part of the deal. The bond is currently trading at 86, and the presenter sees 6.5 – 7.5 points of upside into a deal close over the next 2 – 3 months, noting that the market seems generally unaware that the bond will become secured as part of a new financing agreement.

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Idea Discussion

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