Hawker Beechcraft downsizes bonds to $1.1 billion, shifts $100 million to term loan, sets talk

By Paul A. Harris

St. Louis, March 15 - Hawker Beechcraft Corp. has restructured its note offering and downsized it to $1.1 billion from $1.2 billion, sources told Prospect News on Thursday.

Meanwhile the Wichita, Kan., aircraft manufacturer set price talk on the deal, which is expected to price on Friday.

The company plans to sell $800 million of senior notes (B3/B-) split between two tranches:

• Fixed-rate notes, non-callable for four years, with price talk in the 8¾% area; and

• Payment-in-kind toggle notes, non-callable for four years, with price talk 37.5 basis points behind the senior fixed-rate notes.

In addition Hawker Beechcraft plans to sell a downsized $300 million tranche of 10-year senior subordinated notes (Caa1/B-), which come with five years of call protection. The tranche, which was downsized by $100 million, is talked at 125 bps behind the senior fixed-rate notes.

The company shifted $100 million of planned proceeds to its bank loan from the senior subordinated notes tranche and abandoned a proposed tranche of senior floating-rate notes.

Goldman Sachs & Co., Credit Suisse, Citigroup and Lehman Brothers are joint bookrunners for the Rule 144A and Regulation S with registration rights deal. UBS Investment Bank is the co-manager.

Proceeds will be used to help fund the acquisition of Raytheon Aircraft, the aviation division of Raytheon Co., by Onex Corp. and GS Capital Partners for $3.3 billion.

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