Allison Transmission tenders, seeks consents for 7 1/8% notes due 2019

By Toni Weeks

San Luis Obispo, Calif., March 18 – Allison Transmission Holdings, Inc. announced the start of wholly owned subsidiary Allison Transmission, Inc.’s cash tender offer to purchase any and all of its outstanding $471,263,000 of 7 1/8% senior notes due 2019, according to an 8-K filing with the Securities and Exchange Commission.

The company is also soliciting consents to amend the indenture governing the notes to eliminate substantially all of the restrictive covenants, certain events of default and related provisions.

The total consideration will be $1,042.00 per $1,000 principal amount of notes tendered by 5 p.m. ET on March 31, the consent time. The amount includes a $30.00 consent payment.

Holders who tender their notes after the consent time but before the expiration date, 11:59 p.m. ET on April 14, will not receive the $30.00 consent payment.

The company will also pay accrued interest up to but not including the applicable settlement date, which, for notes tendered by the consent time, will be “promptly” following the consent time. The final settlement date, for notes tendered following the consent time, will be April 15.

Holders may not tender their notes without delivering consents or deliver consents without tendering their notes.

According to the filing, Allison Transmission plans to arrange a $470 million first-lien senior secured term loan facility, the proceeds of which will finance the tender offer. The offer is conditioned upon, among other things, the completion of the bank financing but is not conditioned on the tender of a minimum principal amount of notes.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106) is the dealer manager and solicitation agent. Global Bondholder Services Corp. (866 470-3900 or 212 430-3774) is the depositary and information agent.

Indianapolis-based Allison Transmission is a manufacturer of fully automatic transmissions for medium- and heavy-duty commercial vehicles as well as hybrid-propulsion systems for city buses.

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