UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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| Item 1.01. | Entry into a Material Definitive Agreement. |
On November 28, 2023, TransDigm Inc. (“TransDigm”), a wholly-owned subsidiary of TransDigm Group Incorporated (“TransDigm Group”), completed the previously announced issuance of $2,000 million of new secured debt, consisting of $1,000 million in aggregate principal amount of 7.125% Senior Secured Notes maturing December 1, 2031 (the “Notes”) and $1,000 million in aggregate principal amount of new tranche J term loans maturing February 28, 2031 (the “New Tranche J Term Loans”).
TransDigm Group intends to use the net proceeds of the offering of the Notes and the New Tranche J Term Loans, together with cash on hand, (i) to fund the purchase price of the acquisition of the Electron Device Business of Communications & Power Industries (the “Acquisition”) and (ii) for general corporate purposes, including further increasing TransDigm Group’s liquidity and funding potential future acquisitions, dividends or stock repurchases under its stock repurchase program.
Credit Agreement Amendment
On November 28, 2023, TransDigm, TransDigm Group and certain subsidiaries of TransDigm entered into Amendment No. 13 and Incremental Term Loan Assumption Agreement (the “Credit Agreement Amendment”), pursuant to which TransDigm incurred $1,000 million of New Tranche J Term Loans maturing February 28, 2031. The New Tranche J Term Loans bear interest at a rate of Adjusted Term SOFR (as defined in the Credit Agreement referred to below) plus an applicable margin of 3.25%. Original issue discount of 0.25% was paid to lenders of the New Tranche J Term Loans. The other terms and conditions that apply to the New Tranche J Term Loans are substantially the same as the terms and conditions that apply to the other term loans outstanding under the Credit Agreement. The New Tranche J Term Loans were fully drawn on November 28, 2023.
The Credit Agreement Amendment amends that certain Second Amended and Restated Credit Agreement, dated June 4, 2014, as amended, with Goldman Sachs Bank USA, as administrative agent and collateral agent, and the other agents and lenders named therein (the “Credit Agreement”).
The above summary of the Credit Agreement Amendment is qualified in its entirety by reference to the Credit Agreement Amendment, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Indenture
On November 28, 2023, TransDigm issued $1,000 million in aggregate principal amount of the Notes at an issue price of 99.250% of the principal amount thereof in a private offering to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933 (the “Securities Act”) and to non-U.S. persons outside the United States under Regulation S under the Securities Act.
The Notes were issued pursuant to an indenture, dated as of November 28, 2023 (the “Indenture”), among TransDigm, as issuer, TransDigm Group and the subsidiaries of TransDigm party thereto, as guarantors, The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) and US collateral agent, and The Bank of New York Mellon, as UK collateral agent.
The Notes bear interest at the rate of 7.125% per annum, which accrues from November 28, 2023 and is payable in arrears on June 1 and December 1 of each year, commencing on June 1, 2024. The Notes mature on December 1, 2031, unless earlier redeemed or repurchased, and are subject to the terms and conditions set forth in the Indenture.
TransDigm may redeem some or all of the Notes at the redemption prices and on the terms specified in the Indenture. If TransDigm Group or TransDigm experiences specific kinds of changes in control or TransDigm Group or any of its restricted subsidiaries sells certain of its assets, then TransDigm must offer to repurchase the Notes on the terms set forth in the Indenture. The Notes will not be subject to a special mandatory redemption and will remain outstanding even if TransDigm Group does not consummate the Acquisition.
The Notes are TransDigm’s senior secured obligations. The Notes are guaranteed, on a senior secured basis, by TransDigm Group and each of TransDigm’s direct and indirect restricted subsidiaries that is a borrower or
guarantor under TransDigm’s senior secured credit facilities or that issues or guarantees any capital markets indebtedness of TransDigm or any of the guarantors in an aggregate principal amount of at least $200 million. The Notes and guarantees rank equally in right of payment with all of TransDigm’s and the guarantors’ existing and future senior indebtedness, senior in right of payment to any of TransDigm’s and the guarantors’ existing and future indebtedness that is, by its terms, expressly subordinated in right of payment to the Notes and guarantees, and structurally subordinated to all of the liabilities of TransDigm’s non-guarantor subsidiaries.
The Indenture contains certain covenants that, among other things, limit TransDigm’s ability, and the ability of certain of its subsidiaries, to incur or guarantee additional indebtedness or issue preferred stock, pay distributions on, redeem or repurchase capital stock or redeem or repurchase subordinated debt, make certain investments, engage in certain transactions with affiliates, consummate certain assets sales, effect a consolidation or merger, or sell, transfer, lease or otherwise dispose of all or substantially all assets, incur or suffer to exist liens securing indebtedness and engage in certain business activities. The Indenture contains events of default customary for agreements of its type (with customary grace periods, as applicable) and provides that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect to TransDigm, all outstanding Notes will become due and payable immediately without further action or notice. If any other type of event of default occurs and is continuing, then the Trustee or the holders of at least 25% in principal amount of the then outstanding Notes may declare all Notes to be due and payable immediately.
The above summary of the Indenture is qualified in its entirety by reference to the Indenture, which is attached hereto as Exhibit 4.1 and is incorporated herein by reference.
| Item 2.03. | Creation of a Direct Financial Obligation. |
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
| * | Certain exhibits have been omitted pursuant to Instruction 4 to Item 1.01 of Form 8-K. TransDigm Group hereby undertakes to furnish on a supplemental basis a copy of any omitted exhibit upon request by the Securities and Exchange Commission. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TRANSDIGM GROUP INCORPORATED | ||
| By: | /s/ Sarah Wynne | |
| Name: Sarah Wynne | ||
| Title: Chief Financial Officer | ||
Dated: November 28, 2023