Argo-Tech $250 million seven-year notes talked to yield 9¼%-9½%

By Paul A. Harris

St. Louis, June 15 - Price talk of 9¼% to 9½% emerged Tuesday on Argo-Tech Corp.'s proposed $250 million offering of seven-year senior notes (B1/B), a market source said.

The deal is expected to price Thursday afternoon.

JP Morgan is the bookrunner for the Rule 144A offering. Jefferies & Co. and NatCity Investments are co-managers.

The notes will come with four years of call protection and with a three-year 35% equity clawback.

Proceeds, along with a proposed amended and restated senior credit facility and cash on hand, will be used to purchase or redeem $195 million of the company's 8 5/8% senior subordinated notes, repay $19.9 million under its existing senior credit facility, and purchase the preferred stock of parent company AT Holdings Corp., for about $57.6 million.

The company is a Cleveland manufacturer of aircraft fuel-flow devices.

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