K&F Industries in-market with $505 million credit facility

By Sara Rosenberg

New York, Oct. 25 - K&F Industries Inc. is in-market with a $505 million senior secured credit facility, according to a market source.

Lehman, JPMorgan, Goldman Sachs and Citigroup are the lead banks on the deal, with Lehman acting as left lead.

The facility, which launched Thursday, consists of a $75 million six-year revolving credit facility talked at Libor plus 250 basis points and a $430 million eight-year term loan B talked at Libor plus 275 basis points, the source said.

Proceeds from the credit facility, along with proceeds from a $365 million senior subordinated note issue and a $315 million equity contribution from Aurora Capital Group, will be used to help finance Aurora's acquisition of the company for a cash purchase price of $1.06 billion.

The acquisition is scheduled to close in November.

K&F is a New York supplier to manufacturers and operators of commercial, general aviation and military aircraft. Bernard L. Schwartz and Lehman Brothers Merchant Banking currently jointly own the company.

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