TransDigm has launched a new $1.5 billion term loan L due January 2032 to fund a special shareholder distribution, according to sources. Commitments to the deal are due by noon ET Thursday, Sept. 5.
Price talk is S+250, with a 0% floor and an OID of 99.5-99.75. That implies a yield to maturity of around 7.78%-7.83%. Lenders are offered six months of 101 soft call protection.
Goldman Sachs, Citi, Morgan Stanley, JP Morgan, Capital One, KKR Capital Markets, Wells Fargo, HSBC, BMO Capital Markets, BofA Securities, PNC Capital Markets and RBC Capital Markets are joint lead arrangers on the deal. Goldman is administrative agent.
Proceeds from the new TLL, combined with a concurrent $1.5 billion offering of eight-year (non-call three) senior secured notes and cash on hand, will be used to fund a special cash dividend to shareholders in the range of $3.5-4.5 billion, to make cash dividend equivalent payments on eligible vested options under its stock option plans and to pay related transaction fees and expenses, according to the company.
TransDigm was last in the market in May, when it amended-and-extended $2.64 billion of its term loan I due August 2028 and combined it with its $997 million covenant-lite term loan J due February 2031, which was concurrently repriced to S+250, with a 0% floor. The existing TLI totaled $1.876 billion as of June 29 and pricing on that tranche is S+275, with a 0% floor. In addition to these term loans, TransDigm has a $1.703 billion TLK due March 2030 (S+275, 0% floor).
The company also has several issues of secured notes ranging in maturity between 2028 and 2032 and subordinated notes maturing in 2027 and 2029.
Existing secured debt ratings are BB-/Ba3, with a recovery rating of 3 from S&P Global Ratings, and corporate ratings are BB-/B1, with stable outlooks.
TransDigm (NYSE: TDG) is a global designer, producer and supplier of highly engineered aircraft components.
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