Allison Transmission plans $470 million term loan to fund tender offer

By Toni Weeks

San Luis Obispo, Calif., March 18 – Allison Transmission Holdings, Inc. announced that wholly owned subsidiary Allison Transmission, Inc. plans to enter into a $470 million first-lien senior secured term loan facility under its existing credit agreement dated Aug. 7, 2007, the proceeds of which will finance a tender offer and consent solicitation for the company’s 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 began the tender offer and consent solicitation on Wednesday. The company is 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 offer expires at 11:59 p.m. ET on April 14.

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.

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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