L-3 Communications to bring $500 million notes

By Paul A. Harris

St. Louis, Mo., May 28 - L-3 Communications Corp. is bringing a Rule 144A offering of $500 million senior subordinated notes, a market source told Prospect News Tuesday.

Proceeds from the offering will be used to refinance debt taken out to fund the acquisition of Aircraft Integration Systems from Raytheon Co., specifically $123.5 million of borrowings on its five-year revolving credit facility. The other $364.2 million will be used for general corporate purposes, including potential acquisitions.

The company is also undertaking an approximately $750 million equity offering via Lehman Brothers, the source added. L-3 amended its $1 billion shelf registration Friday to include an equity sale via Lehman with proceeds of $726.5 million, or $835.6 million if the greenshoe is exercised. The filing also said mentioned the concurrent offering of $500 million of senior subordinated notes.

Proceeds from the equity sale will also be used to refinance debt for the Aircraft Integration Systems acquisition, specifically a $500 million senior subordinated interim loan, $150 million of existing debt on its 364-day revolving credit facility and the other $76.5 million of debt on its five-year revolving credit facility.

When asked Tuesday if it was bookrunning the bond deal, Lehman Brothers declined to comment.

The company also declined to comment.

L-3 Communications Holdings, Inc., the parent of L-3 Communications Corp., supplies secure communication systems and other specialized products.

Its senior subordinated debt is currently rated Ba3 by Moody's Investors Service.

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