By Abigail W. Adams
Portland, Me., Feb. 14 – AAR Corp. priced an upsized $550 million of AAR Escrow Issuer LLC five-year senior notes (Ba2/BB) on Wednesday at par with a coupon of 6¾%, according to a market source.
Pricing came tighter than talk for a yield in the 7% area. Early guidance for the notes was for a yield of 7% to 7¼%.
The deal was upsized from $500 million with timing accelerated. The offering was initially slated to price on Thursday.
The notes are non-callable for two years.
Wells Fargo Securities LLC is lead left bookrunner for the Rule 144A and Regulation S offering.
BofA Securities Inc., CIBC World Markets Corp., PNC Capital Markets LLC and Truist Securities Inc. are also bookrunners.
Proceeds will be used to fund a portion of the company’s acquisition of the Triumph Group’s Product Support business with additional proceeds from the upsize to be used to reduce the draw on its credit revolver.
AAR is a Wood Dale, Ill.-based private provider of aviation services.
| Issuer: | AAR Corp.
|
| Amount: | $550 million
|
| Issue: | Senior notes
|
| Maturity: | March 15, 2029
|
| Left bookrunner: | Wells Fargo Securities LLC
|
| Joint bookrunners: | BofA Securities Inc., CIBC World Markets Corp., PNC Capital Markets LLC and Truist Securities Inc.
|
| Coupon: | 6¾%
|
| Price: | Par
|
| Yield: | 6¾%
|
| Spread: | 251 bps
|
| First call: | March 15, 2026
|
| Trade date: | Feb. 14
|
| Settlement date: | March 1
|
| Ratings: | Moody's: Ba2
|
| S&P: BB
|
| Distribution: | Rule 144A and Regulation S
|
| Price talk: | 7% area
|
| Marketing: | Investor call
|
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