Published on 3/16/2007 in the Prospect News High Yield Daily.
New Issue: Hawker Beechcraft prices $1.1 billion notes in three tranches
By Michelle Anderson
Rochester, N.H., March 16 - Hawker Beechcraft Acquisition Co., LLC priced a downsized $1.1 billion of high-yield notes in three tranches on Friday, according to an informed source.
The overall offering of bonds was downsized from $1.2 billion, with $100 million of the financing being shifted to the company's term loan.
The company priced a $400 million tranche of eight-year senior fixed-rate notes (B3/B-) at par to yield 8½%, 12.5 basis points inside of the 8¾% area price talk.
Hawker Beechcraft also priced a $400 million tranche of eight-year senior PIK election notes (B3/B-) at par to yield 8 7/8%, on top of price talk that had the PIK notes pricing 37.5 bps behind the senior fixed-rate notes.
In addition the company priced a $300 million tranche of 10-year senior subordinated notes (Caa1/B-) at par to yield 9¾%, on top of price talk that had the subordinated notes pricing 125 bps behind the senior fixed-rate notes.
Goldman Sachs & Co., Credit Suisse, Citigroup and Lehman Brothers were joint bookrunners for the Rule 144A and Regulation S with registration rights deal. UBS Investment Bank, Scotia, GE, Natexis, and Sumitomo were co-managers.
The Wichita, Kan.-based aircraft manufacturer will use the proceeds 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.
| Issuer: | Hawker Beechcraft Acquisition Co., LLC
|
| Amount: | $1.1 billion (decreased from $1.2 billion with $100 million shifted to term loan)
|
| Bookrunners: | Goldman Sachs & Co., Credit Suisse, Citigroup and Lehman Brothers
|
| Co-managers: | UBS Investment Bank, Scotia, GE, Natexis, and Sumitomo
|
| Trade date: | March 16
|
| Settlement date: | March 26
|
| Distribution: | Rule 144A and Regulation S with registration rights
|
|
|
| Senior fixed-rate notes
|
| Amount: | $400 million
|
| Maturity: | April 1, 2015
|
| Security description: | Senior fixed-rate notes
|
| Coupon: | 8½%
|
| Price: | Par
|
| Yield: | 8½%
|
| Spread: | 396 basis points
|
| Call protection: | Callable on April 1, 2011 at 104.25, 102.125, par on and after April 1, 2013
|
| Equity clawback: | Until April 1, 2010 for 35% at 108.50
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B-
|
| Price talk: | 8¾% area
|
|
|
| Senior PIK election notes
|
| Amount: | $400 million
|
| Maturity: | April 1, 2015
|
| Security description: | Senior PIK election notes
|
| Coupon: | 8 7/8% (plus 75 bps if PIK)
|
| Price: | Par
|
| Yield: | 8 7/8%
|
| Spread: | 434 bps
|
| Call protection: | Callable on April 1, 2011 at 104.438, 102.219, par on and after April 1, 2013
|
| Equity clawback: | Until April 1, 2010 for 35% at 108.875
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B-
|
| Price talk: | 37.5 bps behind senior fixed-rate notes
|
|
|
| Senior subordinated notes
|
| Amount: | $300 million
|
| Maturity: | April 1, 2017
|
| Security description: | Senior subordinated notes
|
| Coupon: | 9¾%
|
| Price: | Par
|
| Yield: | 9¾%
|
| Spread: | 521 bps
|
| Call protection: | Callable on April 1, 2012 at 104.875, 103.25, 101.625, par on and after April 1, 2015
|
| Equity clawback: | Until April 1, 2010 for 35% at 109.75
|
| Ratings: | Moody's: Caa1
|
| Standard & Poor's: B-
|
| Price talk: | 125 bps behind senior fixed-rate notes
|
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