HERBALIFE LTD. 8-K

What Happened
Herbalife Ltd. announced on April 29, 2026 that two of its subsidiaries issued $800 million aggregate principal amount of 7.750% Senior Secured Notes due May 1, 2033, and completed a ninth amendment to its senior secured credit agreement that refinanced its prior facilities. The Notes pay interest semi‑annually (May 1 and Nov 1, beginning Nov 1, 2026), are jointly and severally guaranteed by the company and certain subsidiaries, and are secured on a first‑priority basis by the same collateral that secures the company’s senior secured credit facility. The company used the proceeds and available cash to repay a $365 million term loan B and to fully redeem its outstanding 12.250% Senior Secured Notes due 2029 (redemption paid ~106.125%, ~$852.8 million aggregate).

Key Details

• Notes: $800 million aggregate principal; 7.750% interest; maturity May 1, 2033; interest paid semi‑annually.
• Security & ranking: Senior secured, first‑priority liens on the existing collateral; equal in right of payment with other senior secured debt; structurally subordinated to liabilities of non‑guarantor subsidiaries.
• Redemption features: Callable before May 1, 2029 at 100% + make‑whole; up to 40% callable with equity proceeds before May 1, 2029 at 107.75%; step‑down redemption prices of 103.875% (2029), 101.938% (2030), and 100% (2031+); change‑of‑control repurchase at 101%.
• Credit facilities: Term A facility $225M and Revolving facility $425M under the amended Credit Agreement; interest rates variable (Term SOFR + 2.5–3.25% or base rate + 1.5–2.25% depending on leverage); commitment fee 0.25–0.35% on undrawn revolver.
• Financial covenants: maximum total leverage 4.00:1.00, maximum first‑lien net leverage 2.50:1.00, minimum fixed charge coverage ratio 2.00:1.00.
• Redemption of prior notes: Conditional notice issued April 14, 2026; redemption occurred April 29, 2026, satisfying the financing condition.

Why It Matters
This transaction materially changes Herbalife’s debt profile: it replaces higher‑cost 2029 secured notes (12.25%) with lower‑coupon 7.75% notes and resets the company’s bank facilities, extending and reorganizing committed borrowing capacity. For investors, key implications include lower ongoing interest expense on the refinanced long‑term notes, new secured leverage and covenant metrics to monitor (total leverage, first‑lien leverage, fixed‑charge coverage), and the fact that the new notes share first‑priority collateral with the credit facilities. These are concrete changes to the company’s capital structure and liquidity that may affect credit risk and future financial flexibility.