TransDigm talks $650 million incremental term loan at 99-99.5 OID

By Marisa Wong

Morgantown, W.Va., Oct. 4 – TransDigm Group Inc. launched on Tuesday a $650 million incremental first-lien term loan F with an original issue discount of 99 to 99.5, according to a market source.

The incremental loan (Ba2/B) will be fungible with the company’s existing term loan F.

Like the existing term loan, the add-on loan will mature in June 2023 and bear interest at Libor plus 300 basis points, subject to a 0.75% Libor floor.

The incremental term loan will have 101 soft call protection through June 2017.

Credit Suisse is the lead bank on the deal.

Commitments are due at 5 p.m. ET on Oct. 11, the source said.

The company is seeking the new term loan in connection with considering whether to pay a special dividend, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

The company is considering paying a cash dividend of $1.1 billion to $1.5 billion using the proposed new term loan and cash on hand, according to a press release. The specific timing and aggregate amount of the dividend, if any, has not been determined, the company said.

TransDigm is a Cleveland-based designer, producer and supplier of highly engineered aircraft components for use on commercial and military aircraft.

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