Allison Transmission to issue $500 million eight-year senior notes

By Paul A. Harris

St. Louis, April 26 - Allison Transmission, Inc. began a brief roadshow on Tuesday for a $500 million offering of eight-year senior notes, according to an informed source.

The company held an investor call on Tuesday.

The books are set to close on Wednesday afternoon.

Citigroup Global Markets Inc. is the left bookrunner for the Rule 144A and Regulation S for life deal. Barclays Capital Inc., Deutsche Bank Securities Inc. and UBS Investment Bank are the joint bookrunners.

The notes come with three years of call protection and feature a three-year 35% equity clawback, as well as a 101% poison put.

The notes come with incurrence-based high-yield covenants similar to those of the company's existing senior notes.

Proceeds will be used to fund the concurrent tender offer for the company's 11¼% senior notes due 2015.

The prospective issuer is an Indianapolis-based automatic transmission company.

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