8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 14, 2017

ALERIS CORPORATION

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Delaware	333-185443	27-1539594
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

25825 Science Park Drive, Suite 400, Cleveland, Ohio 44122

(Address of Principal Executive Offices, including Zip Code)

(216) 910-3400

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On February 14, 2017, Aleris International, Inc. (the “Company”) completed the issuance of an additional $250 million aggregate principal amount of 9.500% senior secured notes due 2021 (the “Additional Notes”) in a private offering under Rule 144A and Regulation S of the Securities Act of 1933, as amended. The Company initially issued $550 million aggregate principal amount of 9.500% Senior Secured Notes due 2021 on April 4, 2016, which remain outstanding (the “Initial Notes” and together with the Additional Notes, the “Notes”).

The Company received net proceeds of approximately $261.0 million from the issuance of the Additional Notes after deducting the initial purchasers’ discount and estimated expenses payable in connection with the offering. The Company intends to use the net proceeds of the sale for general corporate purposes, which may include working capital and/or capital expenditures.

The Additional Notes were issued under an Indenture (the “Base Indenture”), dated as of April 4, 2016, by and among the Company, Aleris Corporation (“Parent”), the subsidiary guarantors listed therein (individually, a “Subsidiary Guarantor” and collectively, the “Subsidiary Guarantors,” and together with Parent, the “Guarantors”) and U.S. Bank National Association, as trustee (the “Trustee”) and as collateral agent (the “Collateral Agent”), as supplemented by the first supplemental indenture (the “Supplemental Indenture” and together with the Base Indenture, the “Indenture”), dated as of February 14, 2017, by and among the Company, the Guarantors, the Trustee and the Collateral Agent, relating to the Additional Notes. The Additional Notes together with the Initial Notes will be treated as a single series of debt securities for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase.

The Notes bear interest at an annual rate of 9.500%. Interest is payable on the Notes semi-annually in arrears on April 1 and October 1 of each year. Interest on the Additional Notes will be deemed to have accrued from October 1, 2016 and the first interest payment date for the Additional Notes will be April 1, 2017. The Notes mature on April 1, 2021, unless earlier redeemed or repurchased by the Company. The Notes are secured by a first-priority lien on substantially all of the Company’s and the guarantors’ owned and material U.S. real property, equipment and intellectual property and stock of the Company and the guarantors (other than Parent) and other subsidiaries (including 100% of the outstanding non-voting stock (if any) and 65% of the outstanding voting stock of certain “first-tier” foreign subsidiaries and certain “first-tier” foreign subsidiary holding companies), but subject to permitted liens and excluding (i) inventory, accounts receivable, deposit accounts and related assets, which assets secure the Company’s $600 million asset backed revolving credit facility on a first-priority basis, (ii) the assets associated with the Company’s Lewisport, Kentucky facility and (iii) certain other excluded assets.

From and after April 1, 2018, the Company may redeem the Notes, in whole or in part, at a redemption price of 104.750% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to the redemption date, declining ratably to 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to the redemption date, on or after April 1, 2020. Prior to April 1, 2018, the Company may, at its option, redeem up to 40% of the aggregate principal amount of the Notes with money that the Company raises in certain equity offerings at a redemption price of 109.500%, plus accrued and unpaid interest, if any, to the redemption date. The Company may make such redemption so long as, immediately after the occurrence of any such redemption, 60% of the aggregate principal amount of the Initial Notes and the aggregate principal amount of the Additional Notes and any other additional notes issued after April 4, 2016 remains outstanding. Additionally, at any time prior to April 1, 2018, the Company may redeem some or all of the Notes at a redemption price equal to 100% of the principal amount of the Notes, plus the applicable premium as provided in the Indenture and accrued and unpaid interest, if any, to the redemption price.

If the Company experiences a “change of control” event specified in the Indenture, the Company must offer to purchase all of the Notes at a price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to (but excluding) the date of purchase. In addition, if the Company engages in asset sales and does not invest the cash proceeds in the Company’s business or permanently reduce certain debt, the Company will be required to use the proceeds of such asset sales to make an offer to purchase a principal amount of the Notes equal to the net cash proceeds from such asset sale at a price of 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to (but excluding) the date of purchase.

Subject to certain limitations and exceptions, the Indenture contains covenants limiting the Company’s ability to, among other things:

• incur additional debt;

• pay dividends or distributions on the Company’s capital stock or redeem, repurchase or retire the Company’s capital stock or subordinated debt;

• issue preferred stock of restricted subsidiaries;

• make certain investments;

• create liens on the Company’s or its Subsidiary Guarantors’ assets to secure debt;

• enter into sale and leaseback transactions;

• create restrictions on the payment of dividends or other amounts to the Company from the Company’s restricted subsidiaries that are not guarantors of the Notes;

• enter into transactions with affiliates;

• merge or consolidate with another Company; and

• sell assets, including capital stock of the Company’s subsidiaries.

If any event of default occurs and is continuing under the Indenture, the Trustee or holders of at least 30% in principal amount of the Notes may declare the principal, premium, if any, interest and any other monetary obligations on all outstanding Notes to be due and payable immediately, subject to certain conditions provided in the Indenture. These amounts become due and payable without any further action or notice in the case of certain events of bankruptcy or insolvency with respect to the Company. The following events constitute events of default under the Indenture: (1) default in payment when due and payable, upon redemption, acceleration or otherwise, of principal of, or premium, if any, on the Notes; (2) default for 30 days or more in the payment when due of interest on or with respect to the Notes; (3) failure by the Company or any Subsidiary Guarantor for 60 days after receipt of written notice given by the Trustee or holders of at least 30% in principal amount of then outstanding Notes to comply with any of its other agreements in the Indenture or Notes; (4) default under any mortgage, indenture, or instrument under which there is issued, secured or evidenced any indebtedness for money borrowed by the Company or any restricted subsidiary, if both (a) such default results from the failure to pay any principal of such indebtedness at its stated final maturity or relates to an obligation that causes such indebtedness to become due prior to its stated maturity and (b) the principal amount of such indebtedness, together with the principal amount of any other such indebtedness in default, aggregate $40 million or more at any one time outstanding; (5) failure by the Company or any significant subsidiary to pay final judgments aggregating in excess of $40 million, which final judgments remain unpaid, undischarged and unstayed for more than 60 days after such judgment becomes final; (6) certain events of bankruptcy or insolvency with respect to the Company or any significant subsidiary; and (7) the subsidiary guarantee of any significant subsidiary shall for any reason cease to be in full force and effect or be declared null and void or any responsible officer of any Subsidiary Guarantor that is a significant subsidiary denies that it has any further liability under its subsidiary guarantee.

U.S. Bank National Association, the Trustee and Collateral Agent under the Indenture, or any of its affiliates, in its individual or any other capacity, may make loans to, accept deposits from and perform services for the Company or an affiliate of the Company, and may otherwise deal with the Company or an affiliate of the Company, as if it were not the Trustee and Collateral Agent.

A copy of the Base Indenture and Supplemental Indenture are filed as Exhibits 4.1 and 4.2, respectively, to this Current Report and are hereby incorporated by reference herein. The form of Note (included as Exhibit 1 to Rule 144A / Regulation S Appendix of the Indenture filed as Exhibit 4.1) is filed as Exhibit 4.3 to this Current Report and is hereby incorporated by reference herein. The foregoing descriptions of the Indenture and Notes do not purport to be complete and are qualified in their entirety by reference to the full text of the Base Indenture, Supplemental Indenture and Notes which are filed as Exhibits 4.1, 4.2 and 4.3, respectively.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under and Off-Balance Sheet Arrangement of a Registrant.

The disclosures above under Item 1.01 of this Current Report are also responsive to Item 2.03 of this Current Report and are hereby incorporated by reference into this Item 2.03.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

4.1	Indenture, dated as of April 4, 2016, by and among the Company, the Guarantors named therein and U.S. Bank National Association, as trustee and collateral agent (filed as Exhibit 4.1 to Aleris Corporation’s Current Report on Form 8-K (File No. 333-185443) filed on April 8, 2016, and incorporated herein by reference).
4.2	First Supplemental Indenture, dated as of February 14, 2017, by and among the Company, the Guarantors named therein and U.S. Bank National Association, as trustee and collateral agent.
4.3	Form of 9.500% Senior Secured Notes due 2021 (included within the Indenture filed as Exhibit 4.1).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	ALERIS CORPORATION
Date: February 16, 2017	By:	/s/ Eric M. Rychel
	Name: Eric M. Rychel
	Title:	Executive Vice President, Chief Financial Officer and Treasurer

EXHIBIT INDEX

Exhibit No.	Description
4.1	Indenture, dated as of April 4, 2016, by and among the Company, the Guarantors named therein and U.S. Bank National Association, as trustee and collateral agent (filed as Exhibit 4.1 to Aleris Corporation’s Current Report on Form 8-K (File No. 333-185443) filed on April 8, 2016, and incorporated herein by reference).
4.2	First Supplemental Indenture, dated as of February 14, 2017, by and among the Company, the Guarantors named therein and U.S. Bank National Association, as trustee and collateral agent.
4.3	Form of 9.500% Senior Secured Notes due 2021 (included within the Indenture filed as Exhibit 4.1).

EX-4.2

Exhibit 4.2

FIRST SUPPLEMENTAL INDENTURE

FIRST SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of February 14, 2017, by and among ALERIS INTERNATIONAL, INC., a Delaware corporation (the “Company”), ALERIS CORPORATION, a Delaware corporation (“Parent”), certain of the Company’s direct and indirect domestic Subsidiaries party hereto (together with Parent, the “Guarantors”) and U.S. BANK NATIONAL ASSOCIATION, as trustee (in such capacity, the “Trustee”) and collateral agent (in such capacity, the “Collateral Agent”).

W I T N E S S E T H:

WHEREAS, the Company, the Guarantors, the Trustee and the Collateral Agent have heretofore executed and delivered an indenture, dated as of April 4, 2016 (as amended or supplemented from time to time, the “Indenture”), providing for the issuance of 9.500% Senior Secured Notes due 2021;

WHEREAS, pursuant to and on the date of the Indenture, the Company initially issued $550,000,000 aggregate principal amount of its 9.500% Senior Secured Notes due 2021 (the “Initial Notes”);

WHEREAS, Sections 202 and 312 of the Indenture provide that the Company may, from time to time and in accordance therewith, issue Additional Notes under the Indenture;

WHEREAS, the Company wishes to issue an additional $250,000,000 aggregate principal amount of its 9.500% Senior Secured Notes due 2021 as Additional Notes (the “New Notes”);

WHEREAS, Section 901 of the Indenture provides that, among other things, without the consent of any Holder, the Company, the Guarantors, the Trustee and the Collateral Agent may enter into one or more indentures supplemental to the Indenture to provide for the issuance of Additional Notes in accordance with the terms of the Indenture;

WHEREAS, pursuant to Section 901 of the Indenture, the Trustee and Collateral Agent are authorized to execute and deliver this Supplemental Indenture; and

Whereas, the Company has requested that the Trustee and Collateral Agent execute and deliver this Supplemental Indenture;

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company, the Guarantors, the Trustee and the Collateral Agent mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1. Defined Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture. The words “herein,” “hereof” and “hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.

ARTICLE II

NEW NOTES

SECTION 2.1. Amount of New Notes. The aggregate principal amount of New Notes to be authenticated and delivered under this Supplemental Indenture on February 14, 2017 is $250,000,000.

SECTION 2.2. Terms of New Notes. Provisions relating to the New Notes are set forth in the Appendix, which is hereby incorporated in, and expressly made a part of, this Supplemental Indenture mutatis mutandis. The New Notes are to be issued as Additional Notes under the Indenture and shall:

(a) be issued as part of the existing series of Initial Notes under the Indenture, and the New Notes and the Initial Notes shall be treated as a single class for all purposes under the Indenture;

(b) have identical terms and conditions to the Initial Notes except that the New Notes shall (i) be issued on February 14, 2017, (ii) be issued at a purchase price of 107.000% of the principal amount plus accrued interest deemed to have accrued from October 1, 2016 and (iii) have a first interest payment date of April 1, 2017;

(c) be issuable in whole in the form of one or more Global Notes to be held by the Depository and substantially in the form, including appropriate transfer restriction legends, provided in Exhibit 1 to the Appendix; and

(d) initially bear, in the case of New Notes sold under Rule 144A of the Securities Act, the CUSIP number of 014477 AR4 and ISIN of US014477AR46, and, in the case of New Notes sold under Regulation S of the Securities Act, the CUSIP number of U01484 AH4 and ISIN of USU01484AH49.

ARTICLE III

MISCELLANEOUS

SECTION 3.1. Notices. All notices and other communications to the Company or the Guarantors shall be given as provided in the Indenture.

SECTION 3.2. Parties. Nothing expressed or mentioned herein is intended or shall be construed to give any Person, other than the Holders, the Trustee and the Collateral Agent, any legal or equitable right, remedy or claim under or in respect of this Supplemental Indenture or the Indenture or any provision herein or therein contained.

SECTION 3.3. GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 3.4. Severability. In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.

SECTION 3.5. Benefits Acknowledged. Each of the Company and the Guarantors acknowledge that it will receive direct and indirect benefits from the financing arrangements contemplated by this Supplemental Indenture and that the covenants, guarantees and waivers made by it, as applicable, pursuant to the Indenture and/or this Supplemental Indenture have been knowingly made in contemplation of such benefits. The Notes Guarantees of the Guarantors are subject to the terms and conditions set forth in the Indenture.

SECTION 3.6. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture and each Notes Guarantee is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.

SECTION 3.7. Acknowledgment and Affirmation. The Company and each Guarantor hereby expressly acknowledge, as of the date hereof, (i) all of its obligations under the Security Documents to which it is a party are reaffirmed and remain in full force and effect on a continuous basis, (ii) its grant of security interests pursuant to the Security Documents are reaffirmed and remain in full force and effect after giving effect to the issuance of the New Notes, (iii) the Secured Obligations (as defined in the Security Agreement) include, among other things and without limitation, the due and punctual payment of the principal of, interest on, and premium (if any) on, the Notes and (iv) except as expressly set forth herein, the execution of this Supplemental Indenture shall not serve to effect a novation of the Secured Obligations (as defined in the Security Agreement).

SECTION 3.8. The Trustee and the Collateral Agent. The Trustee and the Collateral Agent shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Company and the Guarantors.

SECTION 3.9. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile, .pdf transmission or other electronic means shall constitute effective execution and delivery of this Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or .pdf transmission or other electronic means shall be deemed to be their original signatures for all purposes.

SECTION 3.10. Headings. The Section and Article headings herein are for convenience only and shall not affect the construction hereof.

[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date and year first above written.

ALERIS INTERNATIONAL, INC.
By:	/s/ Eric M. Rychel
	Name:	Eric M. Rychel
	Title:	Executive Vice President, Chief Financial Officer and Treasurer
ALERIS CORPORATION
By:	/s/ Eric M. Rychel
	Name:	Eric M. Rychel
	Title:	Executive Vice President, Chief Financial Officer and Treasurer
ALERIS ROLLED PRODUCTS, INC.
ALERIS ROLLED PRODUCTS, LLC
ALERIS ROLLED PRODUCTS SALES CORPORATION
IMCO RECYCLING OF OHIO, LLC
ALERIS OHIO MANAGEMENT, INC.
NICHOLS ALUMINUM LLC
By:	/s/ Eric M. Rychel
	Name:	Eric M. Rychel
	Title:	President

U.S. BANK NATIONAL ASSOCIATION,
as Trustee and Collateral Agent
By:	/s/ James Kowalski
	Name:	James Kowalski
	Title:	Vice President