Summary
TransDigm Group Inc. (TDG) filed an 8-K on November 30, 2010, to disclose significant financing and debt management activities. The company announced the upsizing of its new senior secured credit facility to $1.55 billion and a concurrent private placement of senior subordinated notes due 2018, also upsized to $1.55 billion. These actions are primarily aimed at funding the previously announced McKechnie Acquisition, repaying the existing senior secured credit facility, and managing existing debt. Crucially, TransDigm also commenced cash tender offers for any and all of its outstanding 7 3/4% Senior Subordinated Notes due 2014. The company is offering a "Total Consideration" of $1,042 per $1,000 principal amount for notes tendered by December 13, 2010, and a reduced amount for later tenders. These actions reflect a strategic move to refinance and restructure its debt obligations, likely to improve its capital structure and reduce future interest expenses.
Key Highlights
- 1Upsized New Senior Secured Credit Facility to $1.55 billion.
- 2Upsized Private Placement of Senior Subordinated Notes due 2018 to $1.55 billion.
- 3Commenced tender offers and consent solicitations for all outstanding 7 3/4% Senior Subordinated Notes due 2014.
- 4Offering to purchase 2014 Notes at $1,042 per $1,000 principal if tendered by December 13, 2010.
- 5Intends to use proceeds from new financing to fund the McKechnie Acquisition and refinance existing debt.
- 6Pro forma interest expense for the 12 months ended September 30, 2010, is expected to decrease by $12.0 million due to these transactions.
- 7The company plans to repay its existing senior secured credit facility in full.