By Paul A. Harris
St. Louis, Oct. 27 - Argo-Tech Corp., in conjunction with AT Holdings, priced a $67 million issue of eight-year senior discount notes (Caa1/B-) at 63.598 in a quick-to-market transaction to yield 11¾%, according to market sources. The sale generated about $42.6 million of proceeds.
JP Morgan ran the books for the Rule 144A with registration rights issue.
The notes will pay in kind until Oct. 15, 2009, after which they will become cash-pay.
Proceeds will be used to help fund the acquisition of AT Holdings by VGAT Investors LLC, a new entity formed by the private equity firms Greenbriar Equity Group and Vestar Capital Partners.
The issuer is a Cleveland-based manufacturer of aircraft fuel-flow devices.
| Issuer: | Argo-Tech Corp. and AT Holdings
|
| Face amount: | $67 million
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| Proceeds: | $42.6 million (approximate)
|
| Maturity: | Oct. 15, 2012
|
| Security description: | Senior discount notes
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| Bookrunner: | JP Morgan
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| Coupon: | PIK until Oct. 15, 2009 then 11¾%
|
| Price: | 63.598
|
| Yield: | 11¾%
|
| Spread: | 721 basis points
|
| Call protection: | Make-whole call at Treasuries plus 50 basis points until Oct. 15, 2007
|
| Equity clawback: | Until Oct. 15, 2006 for 35%
|
| Trade date: | Oct. 27
|
| Settlement date: | Oct. 28
|
| Ratings: | Moody's: Caa1
|
| Standard & Poor's: B-
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