New Issue: DRS Technologies upsizes two-part deal to $600 million

By Paul A. Harris

St. Louis, Jan. 20 - DRS Technologies Inc. priced an upsized $600 million two-part high-yield notes transaction on Friday, according to informed sources.

The Parsippany, N.J.-based provider of technology products and services priced an upsized $350 million of 10-year senior notes (B2/B+) at par to yield 6 5/8%. The issue, which was upsized from $325 million, priced at the wide end of the 6¾% area price talk.

Meanwhile DRS Technologies also priced a $250 million issue of 12-year senior subordinated notes (B3/B) at par to yield 7 5/8%, again at the wide end of the 7¾% area price talk.

Bear Stearns & Co. ran the books for the registered issues. Wachovia Securities was the joint lead manager. Merrill Lynch, Banc of America Securities, CIBC World Markets, Jefferies and Ryan Beck & Co. were the co-managers.

Proceeds will be used to help fund the acquisition of Engineered Support Systems Inc., a St. Louis-based diversified supplier of integrated military electronics, support equipment and technical services.

The entire overall transaction was upsized from the planned $575 million.

Issuer:	DRS Technologies Inc.
Amount:	$600 million (increased from $575 million)
Bookrunner:	Bear Stearns & Co.
Joint lead manager:	Wachovia Securities
Co-managers:	Merrill Lynch, Banc of America Securities, CIBC World Markets, Jefferies, Ryan Beck & Co.
Trade date:	Jan. 20
Settlement date:	Jan. 31
Distribution:	SEC registered
Senior notes
Amount:	$350 million (increased from $325 million)
Maturity:	Feb. 1, 2016
Coupon:	6 5/8%
Price:	Par
Yield:	6 5/8%
Call protection:	Callable after Feb. 1, 2011 at 103.313, 102.208, 101.104, par on and after Feb. 1, 2014
Equity clawback:	Until Feb. 1, 2009 for 35% at 106.625
Ratings:	Moody's: B2
	Standard & Poor's: B+
Price talk:	6¾% area
Senior subordinated notes
Amount:	$250 million
Maturity:	Feb. 1, 2018
Coupon:	7 5/8%
Price:	Par
Yield:	7 5/8%
Call features:	Callable after Feb. 1, 2011 at 103.813, 102.542, 101.271, par on and after Feb. 1, 2014
Equity clawback:	Until Feb. 1, 2009 for 35% at 107.625
Ratings:	Moody's: B3
	Standard & Poor's: B
Price talk:	7¾% area

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