Allison Transmission to sell $500 million 10-year notes on Tuesday

By Paul A. Harris

Portland, Ore., March 26 – Allison Transmission, Inc. plans to price a $500 million offering of 10-year senior notes (expected ratings Ba3//BB) in a quick-to-market Tuesday trade following a mid-morning conference call with investors, according to market sources.

Early guidance has the deal shaping up with a yield in the low 6% area, a bond trader said.

Citigroup Global Markets Inc. is the left bookrunner for the Rule 144A and Regulation S for life offering. BMO Securities, Fifth Third Securities Inc., Barclays, BofA Merrill Lynch, J.P. Morgan Securities LLC, MUFG, SMBC Nikko Securities America Inc., Deutsche Bank Securities Inc. and Goldman Sachs & Co. LLC are the joint bookrunners.

The notes become callable after five years at par plus 50% of the coupon and feature a three-year 40% equity clawback and a 101% poison put.

The Indianapolis-based automatic transmission company and supplier of hybrid-propulsion systems plans to use the proceeds to pay down its term loan B.

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