Summary
TransDigm Group Inc. (TDG), through its wholly-owned subsidiary TransDigm Inc., successfully completed private offerings of $4.0 billion in aggregate principal amount of 6.25% Senior Secured Notes due 2026 and $550 million in aggregate principal amount of 7.50% Senior Subordinated Notes due 2027. The issuance closed on February 13, 2019, with notes sold to qualified institutional buyers and persons outside the United States. These offerings represent a significant capital raise for the company, with proceeds intended for general corporate purposes and potentially to fund the previously announced acquisition of Esterline Technologies Corporation. The Senior Secured Notes are secured by a first-priority security interest in substantially all assets of TransDigm and its guarantors, ranking equally with existing senior secured debt. The Senior Subordinated Notes are subordinated to senior debt and rank equally with existing senior subordinated debt. Both note issuances are subject to customary covenants and events of default, and include provisions for mandatory repurchase under certain change-of-control or asset sale scenarios. Notably, the Secured Notes are subject to a special mandatory redemption if the Esterline Acquisition is not consummated by a specified date, which provides a level of protection for investors in the event the acquisition does not proceed.
Key Highlights
- 1Completion of private offerings for $4.0 billion of 6.25% Senior Secured Notes due 2026 and $550 million of 7.50% Senior Subordinated Notes due 2027.
- 2Total debt raised amounts to $4.55 billion through these offerings.
- 3Senior Secured Notes are secured by a first-priority lien on substantially all company assets, ranking pari passu with other senior secured debt.
- 4Senior Subordinated Notes are subordinated to senior debt and rank equally with other senior subordinated debt.
- 5The Secured Notes feature a special mandatory redemption provision if the Esterline Technologies Corporation acquisition is not completed by a specified date.
- 6Notes were offered to qualified institutional buyers (Rule 144A) and non-US persons (Regulation S).
- 7Proceeds are intended for general corporate purposes and potentially to finance the Esterline Acquisition.