TransDigm Group Announces Proposed Private Offering to Refinance Senior Subordinated Notes

Rhea-AI Summary

TransDigm Group announced plans to offer $1,200 million of senior subordinated notes through its subsidiary, TransDigm Inc. The offering is intended to refinance existing senior subordinated notes due 2024. The Notes will be privately offered, exempt from certain registration requirements. The offering is subject to market conditions and is expected to include guarantees from TransDigm Group and its U.S. subsidiaries.

This refinancing aims to improve the company's financial position amid uncertainties from the pandemic.

Positive

• The offering aims to refinance $1,200 million in senior subordinated notes, potentially lowering interest obligations.
• Improved cash flow management through the use of proceeds from the offering.

Negative

• The company remains exposed to market and economic uncertainties, which could impact the successful completion of the offering.
• Continued reliance on debt increases financial risk and exposure to interest rate fluctuations.

CLEVELAND, Jan. 14, 2021 /PRNewswire/ -- TransDigm Group Incorporated ("TransDigm Group") (NYSE: TDG) announced today that its wholly-owned subsidiary, TransDigm Inc., is planning, subject to market and other conditions, to offer $1,200 million aggregate principal amount of senior subordinated notes (the "Notes") in a private offering that will be exempt from the registration requirements of the Securities Act of 1933 (the "Securities Act"). It is expected that the Notes will be guaranteed, with certain exceptions, by TransDigm Group, TransDigm UK Holdings plc and all of TransDigm Inc.'s existing and future U.S. subsidiaries on a senior subordinated basis.

TransDigm Group intends to use the net proceeds from the offering of the Notes, plus cash on hand, to redeem all of its outstanding 6.500% senior subordinated notes due 2024.

This is not an offer to sell or the solicitation of an offer to buy any securities. The Notes and related guarantees are being offered only to qualified institutional buyers in reliance on the exemption from registration set forth in Rule 144A under the Securities Act, and outside the United States to non-U.S. persons in reliance on the exemption from registration set forth in Regulation S under the Securities Act. The Notes and the related guarantees have not been registered under the Securities Act, or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the Securities Act, applicable state securities or blue sky laws and foreign securities laws.

About TransDigm Group

TransDigm Group, through its wholly-owned subsidiaries, is a leading global designer, producer and supplier of highly engineered aircraft components for use on nearly all commercial and military aircraft in service today. Major product offerings, substantially all of which are ultimately provided to end-users in the aerospace industry, include mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, databus and power controls, cockpit security components and systems, specialized and advanced cockpit displays, aircraft audio systems, specialized lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, advanced sensor products, switches and relay panels, thermal protection and insulation, lighting and control technology, parachutes, high performance hoists, winches and lifting devices, and cargo loading, handling and delivery systems.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve risks and uncertainties that could cause TransDigm Group's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, TransDigm Group. These risks and uncertainties include but are not limited to: the ability to successfully complete the offering of the Notes; the impact that the COVID-19 pandemic has on TransDigm Group's business, results of operations, financial condition and liquidity; the sensitivity of TransDigm Group's business to the number of flight hours that TransDigm Group's customers' planes spend aloft and its customers' profitability, both of which are affected by general economic conditions; future geopolitical or other worldwide events; cyber-security threats and natural disasters; TransDigm Group's reliance on certain customers; the U.S. defense budget and risks associated with being a government supplier including government audits and investigations; failure to maintain government or industry approvals; failure to complete or successfully integrate acquisitions, including TransDigm Group's acquisitions of Esterline Technologies Corporation and Cobham Aero Connectivity; TransDigm Group's indebtedness; potential environmental liabilities; liabilities arising in connection with litigation; increases in raw material costs, taxes and labor costs that cannot be recovered in product pricing; risks and costs associated with TransDigm Group's international sales and operations; and other risk factors. Further information regarding the important factors that could cause actual results to differ materially from projected results can be found in TransDigm Group's Annual Report on Form 10-K for the fiscal year ended September 30, 2020 and other reports that TransDigm Group or its subsidiaries have filed with the Securities and Exchange Commission. Except as required by law, TransDigm Group undertakes no obligation to revise or update any forward-looking statements contained in this press release.

Contact:	Investor Relations
	216-706-2945
	ir@transdigm.com

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SOURCE TransDigm Group Inc.

FAQ

What is TransDigm Group planning with the $1,200 million notes offering?

TransDigm Group is offering $1,200 million in senior subordinated notes to refinance existing debt.

What is the purpose of the senior subordinated notes offering by TDG?

The proceeds from the offering will be used to redeem all outstanding 6.500% senior subordinated notes due 2024.

How will the notes offering affect TDG shareholders?

The offering may improve the financial position of TDG, but it increases debt obligations, presenting risks to shareholders.

Are the senior subordinated notes being registered with the SEC?

No, the notes are being offered privately, exempt from registration under the Securities Act.

What guarantees will be associated with the senior subordinated notes?

The notes will be guaranteed by TransDigm Group and its existing and future U.S. subsidiaries on a senior subordinated basis.