Spirit AeroSystems to price $1 billion five-year second-lien notes in Tuesday drive-by

By Paul A. Harris

Portland, Ore., April 14 – Spirit AeroSystems, Inc. plans to sell $1 billion of five-year senior secured second-lien notes (Ba2/BB-) in a Tuesday drive-by trailing a mid-morning conference call with investors, according to market sources.

Initial talk has the deal coming to yield in the low 8% area, according to a trader.

However, it is highly unlikely that investors will realize anything close to that level of return on the Spirit AeroSystems secured paper set to price on Tuesday, the trader said.

That's because demand for the paper is expected to be intense, as has been the demand for most if not all of the busy post-Easter week's high-yield bond deals, the source said.

The Spirit AeroSystems new second-lien notes that will mature in 2025 will ultimately be priced to yield in the low 7% area, the trader forecast.

Goldman Sachs & Co. LLC is the left bookrunner. BofA Securities Inc., Citigroup Global Markets Inc., Mizuho Securities USA Inc. and Morgan Stanley & Co. LLC are the joint bookrunners.

The Rule 144A and Regulation S for life notes become callable after two years at par plus 50% of the coupon.

The Wichita, Kan.-based maker of commercial and military airplane components plans to use the proceeds for general corporate purposes, including repayment of some or all of amounts under a revolving credit facility, which amounts may be immediately re-borrowed.

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