8-KRegulation FDOther EventsExhibits & Filings

TransDigm Group INC 8-K Report, Regulation FD Disclosure (Dec 1, 2010)

Filed December 1, 2010For Securities:TDG

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.

Frequently Asked Questions

The primary purpose is to fund the acquisition of McKechnie, repay the company's existing senior secured credit facility, and manage its outstanding debt. The upsizing of the new credit facility and the issuance of new notes will provide the necessary capital for these significant financial events.

TransDigm is offering to purchase any and all of its 2014 Notes. Holders who validly tender their notes at or prior to December 13, 2010, will receive a "Total Consideration" of $1,042 per $1,000 principal amount. Holders tendering after this date but before December 28, 2010, will receive $1,012 per $1,000 principal.

The company expects these transactions to lead to a pro forma decrease in net interest expense for the 12-month period ended September 30, 2010, by approximately $12.0 million, bringing it to $204.1 million. This is a result of refinancing higher-cost debt and managing its overall debt structure.

The existing senior secured credit facility will be repaid in full and terminated using the proceeds from the new financing and offering. This is part of the company's strategy to consolidate and potentially improve its credit facilities.