TransDigm mulls $2.35 billion subordinated debt in debt refinancing and dividend funding effort

By Paul A. Harris and Sara Rosenberg

Portland, Ore., May 13 - TransDigm Inc. may issue $2.35 billion of new subordinated debt in its effort to refinance its 7¾% senior subordinated notes and to pay a cash dividend, according to a market source.

Debt financing also includes a $625 million term loan and a $122 million add-on to its existing revolver.

A conference call to launch the bank debt took place on Tuesday.

The loans are being led by Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding Inc., Barclays, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., RBC Capital Markets and UBS AG.

Proceeds will be used to help finance the purchase of any and all of the company's outstanding $1.6 billion 7¾% senior subordinated notes due 2018 and pay a cash dividend in the range of $900 million to $1.5 billion.

Funds for the notes buyback and dividend may also come from about $200 million of trade receivables securitization facility borrowings and cash on hand.

TransDigm is a Cleveland-based designer, producer and supplier of highly engineered aircraft components.

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