TransDigm hit on short-seller report; Cengage, McGraw-Hill loans tumble, Inflows continue

By Paul A. Harris

Portland, Ore., Jan. 20 – The Friday bank loan market focused on TransDigm Group Inc., which received cold treatment from short seller Citron Research, the same outfit that sent shudders through holders of Valeant Pharmaceuticals International Inc.'s securities in late 2015, a loan trader said.

The Citron report suggested that the aircraft components company's bottom line could be adversely impacted should President Trump follow through with promises to drive harder bargains with military aircraft producers, a pricing pinch that could be passed along to subcontractors such as TransDigm.

Citron suggested that TransDigm's business model is to aerospace what Valeant's is to pharmaceuticals.

TransDigm's term loan F paper, a tranche that still has call protection, traded to 99 bid on Friday afternoon, down from par ¾ bid before the report, a bank loan trader said.

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