Global Aviation to price $165 million secured notes later this week

By Paul Deckelman

New York, Aug. 4 - Global Aviation Holdings Inc.'s $165 million senior secured bond deal is expected to come in for a landing later in the week, a high yield market source said Tuesday.

The Peachtree City, Ga.-based passenger and cargo air carrier has been on the road since July 22, marketing its first-lien notes due 2013 to potential investors. Although that roadshow was originally expected to have run through this past Friday, a source indicated that it had been extended and would now conclude on Wednesday.

After that, he said, the deal would "wrap up" later this week.

Pre-deal market price talk has not yet emerged on the Rule 144A/Regulation S offering, which will include three years of call protection.

The deal is being brought to market via Jefferies & Co.

Global Aviation Holdings is a provider of worldwide commercial global passenger and cargo air transportation services under its World Airways and North American Airlines brands, and claims to be the largest commercial provider of charter air transportation for the U.S. military. It plans to use the proceeds of the bond offering, along with that of its $64.1 million five-year senior secured second-lien loan being concurrently marketed to bank debt investors by Jefferies, to refinance its outstanding bank debt.

Moody's Investors Service assigned a Ba3 rating to the bond deal, with a stable outlook, while Standard & Poor's gave it a BB- rating and 1 recovery rating, indicating expectations of a very high recovery in the event of payment default.

However, Moody's only assigned Global Aviation corporate family and probability of default ratings of B3, while S&P gave it a B corporate credit rating. The latter agency said that lower rating reflected Global's weak credit protection measures due to high lease-adjusted debt, modest positions in the currently depressed commercial cargo and passenger air charter market, and limited financial flexibility.

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