Hawker Beechcraft begins $100 million tender offer for 8 7/8%/9 5/8% PIK, 9¾%, 8½% notes

By Susanna Moon

Chicago, May 5 - Hawker Beechcraft Acquisition Co., LLC and Hawker Beechcraft Notes Co. said they plan to purchase a portion of their outstanding 8 7/8% - 9 5/8% in-kind - senior pay-in-kind notes due April 1, 2015, 9¾% senior subordinated notes due April 1, 2017 and 8½% senior fixed-rate notes due April 1, 2015.

The companies will spend up to $100 million on the offer, excluding accrued interest.

Notes will be purchased in cash according to the acceptance priority level.

For each $1,000 face amount, the companies will pay the following total amounts for the notes, listed in order of priority level:

• $300 for the 8 7/8%/9 5/8% PIK notes, with $385.36 million outstanding;

• $340 for the 9¾% notes, with $220.60 million outstanding; and

• $420 for the 8½% notes, with $271.96 million outstanding.

The total payment includes an early tender premium of $30 for notes tendered by 5 p.m. ET on May 18.

The tender offer will expire at midnight ET on June 2.

Goldman, Sachs & Co. (800 828-3182 or collect 212 357-4692) is the dealer manager. MacKenzie Partners, Inc. (800 322-2885 or collect 212 929-5500) is the depositary and information agent.

Following completion of the offer, the company plans to evaluate its future balance sheet management plans, which could include additional repurchases of notes as well as repayment under its revolving credit facility or prepayment of its term loan, according to a 10-Q filing with the Securities and Exchange Commission.

The company's management believes that cash on hand and cash from operations will be sufficient to meet requirements for the next 12 months after considering the impact of the planned tender offer, the release continued.

Hawker Beechcraft is a Wichita, Kan., manufacturer of business jet, turboprop, piston-driven and military training aircraft.

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