New Issue: Allison Transmission prices $500 million eight-year notes at par to yield 7 1/8%

By Paul A. Harris

Portland, Ore., April 27 - Allison Transmission, Inc. priced a $500 million issue of eight-year senior notes (Caa1/CCC+/) at par to yield 7 1/8% on Wednesday, according to an informed source.

The yield printed at the tight end of price talk, which had been set in the 7¼% area.

Citigroup Global Markets Inc. (left books), Barclays Capital Inc., Deutsche Bank Securities Inc. and UBS Investment Bank were the joint bookrunners for the quick-to-market issue.

The Indianapolis-based automatic transmissions company plans to use the proceeds to fund the concurrent tender offer for its 11¼% senior notes due 2015.

Issuer:	Allison Transmission, Inc.
Amount:	$500 million
Maturity:	May 15, 2019
Securities:	Senior notes
Bookrunners:	Citigroup Global Markets Inc. (left books), Barclays Capital Inc., Deutsche Bank Securities Inc., UBS Investment Bank
Coupon:	7 1/8%
Price:	Par
Yield:	7 1/8%
Spread:	413 bps
Call features:	Make-whole call at Treasuries plus 50 bps until May 15, 2015, then callable at 103.563, 101.781, par on and after May 15, 2017
Equity clawback:	35% at 107.125 until May 15, 2014
Trade date:	April 27
Settlement date:	May 6
Ratings:	Moody's: Caa1
	Standard & Poor's: CCC+
Distribution:	Rule 144A and Regulation S for life
Price talk:	7¼% area
Marketing:	Quick to market

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