Published on 10/29/2019 in the Prospect News High Yield Daily.
New Issue: TransDigm prices upsized $2.65 billion 5½% eight-year subordinated notes at par
By Paul A. Harris
Portland, Ore., Oct. 29 – TransDigm Inc. priced an upsized $2.65 billion issue of eight-year senior subordinated notes (B3/B-) at par to yield 5½% in a Tuesday drive-by, according to a syndicate source.
The issue size increased from $2.15 billion.
The yield printed in the middle of yield talk in the 5½% area.
The order book was heard to have built to more than $3 billion by the middle of Tuesday morning, according to a bond trader.
Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, KKR Capital Markets, RBC Capital Markets LLC, Barclays, Credit Agricole CIB, HSBC Securities (USA) Inc. and PNC Capital Markets LLC were the joint bookrunners.
The Cleveland-based producer of highly engineered aircraft components plans to use the proceeds to refinance its 6% senior subordinated notes due 2022 and fund cash to its balance sheet in order to support general corporate purposes, which may include potential acquisitions, reinvestment into the business, dividends, or purchases under its stock repurchase program.
| Issuer: | TransDigm Inc.
|
| Amount: | $2.65 billion, increased from $2.15 billion
|
| Maturity: | Nov. 15, 2027
|
| Securities: | Senior subordinated notes
|
| Bookrunners: | Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, KKR Capital Markets, RBC Capital Markets LLC, Barclays, Credit Agricole CIB, HSBC Securities (USA) Inc. and PNC Capital Market LLC
|
| Coupon: | 5½%
|
| Price: | Par
|
| Yield: | 5½%
|
| Spread: | 373 bps
|
| First call: | Make-whole call at Treasuries plus 50 bps until Nov. 15, 2022, then callable at 102.75
|
| Equity clawback: | 35% at 105.5 until Nov. 15, 2022
|
| Trade date: | Oct. 29
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| Settlement date: | Nov. 13
|
| Ratings: | Moody's: B3
|
| S&P: B-
|
| Distribution: | Rule 144A and Regulation S with registration rights
|
| Price talk: | 5½% area
|
| Marketing: | Quick to market
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