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ITEM 1.01.
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ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
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On July 3, 2019, Avon International Capital p.l.c. (the “Issuer”), a wholly-owned subsidiary of Avon Products, Inc. (the “Company”), closed its offering of $400,000,000 in aggregate principal amount
of 6.50% Senior Secured Notes due 2022 (the “Notes”) in a private placement. The Notes were issued pursuant to an indenture, dated as of July 3, 2019 (the “Indenture”), among the Issuer, the guarantors party thereto (including the Company) and
Deustche Bank Trust Company Americas, as trustee and collateral agent (the “Trustee”).
The Notes bear interest at 6.50% per annum payable semi-annually in arrears in cash on February 15 and August 15 of each year, commencing on August 15, 2019. The Issuer will make each interest payment
to the holders of record on the February 1 and August 1 immediately preceding the applicable interest payment date. The Notes will mature on August 15, 2022.
The Notes will be guaranteed by the Company and each of the Company’s current and future wholly-owned subsidiaries that is a guarantor under the Issuer’s existing revolving credit agreement, dated as
of February 12, 2019 (as amended or supplemented, the “First Lien Revolving Credit Facility”). The Notes and the guarantees will be the Issuer’s and the guarantors’ senior obligations, will rank equally in right of payment with all of the Issuer’s
and the guarantors’ other existing and future senior indebtedness and will be effectively subordinated in right of payment to all existing and future liabilities of the Company’s subsidiaries that do not guarantee the Notes. The Notes and related
guarantees will be secured equally and ratably with the indebtedness incurred under the First Lien Revolving Credit Facility, the 7.875% Senior Secured Notes due 2022 issued by Avon International Operations, Inc., a wholly-owned domestic subsidiary
of the Company (“AIO”) and certain other indebtedness that is permitted to be secured by such assets, by a first-priority lien on substantially all of the assets of the Issuer and the guarantors, in each case, subject to certain exceptions and
permitted liens.
The Issuer may redeem all or a portion of the Notes beginning on August 15, 2019, at the redemption prices set forth in the Indenture. The Issuer may also redeem any of the Notes at any time prior to
August 15, 2019, at a price equal to 100% of the aggregate principal amount thereof plus a “make-whole” premium and accrued and unpaid interest. Prior to August 15, 2019, the Issuer may redeem up to 35% of the aggregate principal amount of the Notes
with the net cash proceeds of certain equity offerings. Upon the occurrence of a change of control, the Issuer will be required to offer to purchase each holder’s Notes at a purchase price equal to 101% of the aggregate principal amount thereof, plus
accrued and unpaid interest, if any.
The Indenture contains customary covenants, which will, subject to a number of qualifications and exceptions, among other things, limit the ability of the Company and its restricted subsidiaries
(including the Issuer) to: incur additional debt; pay dividends and make distributions or repurchase stock; make certain investments; create or incur liens; sell assets; enter into restrictions affecting the ability of restricted subsidiaries to make
distributions, loans or advances or transfer assets to the Company or any subsidiary guarantor; enter into certain transactions with the Company’s affiliates; and merge or consolidate or transfer or sell all or substantially all of the Issuer’s or
any guarantor’s assets. The Indenture also contains a covenant requiring AIO and its restricted subsidiaries to, at the end of each year, own at least a certain percentage of the total assets of the Company and its restricted subsidiaries, subject to
certain qualifications.
If an event of default arises from certain events of bankruptcy or insolvency with respect to the Company, AIO, the Issuer or any other significant subsidiary of the Company, all outstanding Notes
will become due and payable immediately without further action or notice. If other events of default arise, including failure to pay principal or interest when due and payable, upon redemption, acceleration or otherwise, failure to comply with the
agreements under the Indenture, default under or acceleration of certain other indebtedness, failure to pay certain judgments, and repudiation or unenforceability of obligations under certain collateral documents or the guarantees of AIO or any other
significant subsidiary of the Company, subject to certain limitations, including, if applicable, the giving of notice or the expiration of any grace or cure period, or both, the trustee or holders of at least 25% of the aggregate principal amount of
the then outstanding Notes may declare the Notes to be due and payable immediately.
The foregoing description of the Indenture does not purport to be complete and is qualified in its entirety by reference to the Indenture, attached hereto as Exhibit 4.1, and incorporated herein by
reference.