Hawker Beechcraft seeks OK of $600 million exit financing commitment

By Caroline Salls

Pittsburgh, Jan. 14 - Hawker Beechcraft, Inc. requested court approval to enter into a commitment for $600 million in exit financing from JPMorgan Chase Bank, NA and J.P. Morgan Securities LLC, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Under the exit financing letters, the commitment parties agreed to underwrite, structure, arrange and syndicate a $375 million senior secured term loan facility and a $225 million senior secured asset-based revolving credit facility.

The company said the term loan proceeds will be used to pay in full all outstanding amounts under its $400 million debtor-in-possession facility, make specified settlement and cure payments and provide working capital to the reorganized Hawker Beechcraft for its business operations and other general corporate purposes.

The revolver will likely remain undrawn on the plan of reorganization effective date and will be available after that to support operating needs.

The term loan will mature in seven years and the revolver will mature in five years.

If the initial Moody's Investors Service's rating is Ba3 or higher and the initial Standard & Poor's rating is BB- or higher, in each case with a stable or better outlook, interest on the term loan will be Base rate plus 300 basis points or Libor plus 400 bps.

If the initial Moody's rating is B1 and the initial S&P rating is B+, in each case with at least a stable or better outlook, term loan interest will be Base rate plus 375 bps or Libor plus 475 bps.

If neither of those ratings scenarios applies, term loan interest will be either Base rate plus 400 bps or Libor plus 500 bps.

Interest on the revolver will depend on available credit, with Base rate loans accruing interest at either Base rate plus 75 bps, Base rate plus 100 bps or Base rate plus 125 bps and Libor loans at either Libor plus 175 bps, Libor plus 200 bps or Libor plus 225 bps.

Hawker Beechcraft is a Wichita, Kan.-based manufacturer of business, special mission, light attack and trainer aircraft. The company filed for bankruptcy on May 3, 2012 under Chapter 11 case number 12-11873.

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