TransDigm returns with $750 million two-part notes offering, to price in Friday drive-by

By Paul A. Harris

Portland, Ore., Feb. 1 – Two days after it priced an upsized secured bond deal and abandoned an effort to place subordinated notes, TransDigm, Inc. returned to the market on Friday with a $200 million tap of its new 6¼% senior secured notes due March 15, 2026 (B3/B+) and a $550 million offering of eight-year senior subordinated notes (B3/B-).

Both tranches are set to price in quick-to-market Friday trades.

The add-on notes to the 6¼% notes due March 2026 are talked to price at 101, making a concession to their Friday morning trading levels of 101¼ bid, 101½ offered, a trader said. The notes priced at par in an upsized $3.8 billion (from $3.7 billion) tranche on Wednesday.

The Rule 144A for life and Regulation S secured notes feature a make-whole call at Treasuries plus 50 basis points until March 15, 2022, then become callable at 103.125.

Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Barclays, RBC Capital Markets LLC, Credit Agricole CIB and KCM Capital Partners are the joint bookrunners for the secured notes.

Proceeds will be used to fund a portion of the acquisition of Esterline Technologies Corp., a Bellevue, Wash.-based manufacturer principally serving aerospace and defense markets.

Also on Friday, TransDigm plans to price a portion of the senior subordinated notes it withdrew from the market earlier in the week.

The junior tranche features $550 million of eight-year senior subordinated notes (B3/B-), which are non-callable for three years.

Morgan Stanley, Credit Suisse, KCM, Citigroup, Barclays and RBC are the joint bookrunners for the Rule 144A and Regulation S with registration rights subordinated notes.

The Cleveland-based producer of highly engineered aircraft components plans to use the proceeds from the subordinated notes to redeem its 5½% senior subordinated notes due 2020.

On Wednesday, TransDigm withdrew a $1 billion tranche of eight-year senior subordinated notes. Those proceeds were shifted to 6¼% secured notes.

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