Gogo to sell $50 million more 12½% notes due 2022 on Tuesday

By Paul A. Harris

Portland, Ore., Dec. 20 – In-flight connectivity services provider Gogo plans to price a $50 million add-on to the Gogo Intermediate Holdings LLC/Gogo Finance Co. Inc. 12½% senior secured notes due July 1, 2022 (current ratings B2/B-) on Tuesday trailing a late-morning conference call with investors, according to an informed source.

The existing 12½% notes due 2022 were trading around 107½ bid, 108½ offered, according to a trader, who added that initial price talk for the add-on was pending.

Morgan Stanley & Co. LLC is the bookrunner for the Rule 144A and Regulation S for life add-on.

The notes feature a make-whole call at Treasuries plus 50 basis points until July 1, 2019, then become callable at 106.25. They also have a 35% equity clawback at 112.5 until July 1, 2019.

The Chicago-based company plans to use the proceeds for working capital and other general corporate purposes.

Gogo provides in-flight connectivity and wireless entertainment services for the global aviation industry.

The original $525 million issue priced at par on June 9, 2016. Those notes priced 50 basis points behind the Gogo Intermediate Holdings 12% senior secured notes due June 1, 2022 which the company sold in a $525 million issue on May 23, 2016, an issue that was subsequently cancelled.

The Rule 144A notes will immediately become fungible with original notes. The Regulation S add-on notes will become fungible with the original notes following a 40-day cooling period.

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