Having just completed a US$350m bond offering, Alliant Techsystems (ATK) is now seeking to refinance its existing debt with a US$400m term loan and US$600m revolver.
Prior to the bond issue, ATK had approximately US$1.38bn of outstanding total debt,…
Having just completed a US$350m bond offering, Alliant Techsystems (ATK) is now seeking to refinance its existing debt with a US$400m term loan and US$600m revolver.
Prior to the bond issue, ATK had approximately US$1.38bn of outstanding total debt, US$561.3m of which matures within the next two years. This is split between the US$261.3m that is outstanding on its senior term loan A, which is due 29 March 2012, and US$300m of 2.75% convertible senior subordinated notes, due 2011.
The company also has a US$500m revolving credit facility that is due in 2012. While there are no outstanding borrowings under the revolver, ATK had outstanding letters of credit of US$176.8m, reducing the amount available under the facility to US$323.2m
The majority of the US$1bn of new debt that ATK is seeking to raise is expected to be used to replace its bank debt rather than the convertible notes.
The company’s longer term debt comprises US$400m of 6.75% senior subordinated notes, due 2016, just under US$200m of 3% convertible senior subordinated notes, due 2024, and US$280m of 2.75% convertible senior subordinated notes, due 2024. ATK recently announced the redemption of the US$280m 2.75% notes using the proceeds of the US$350m bond offering. The redemption date for the notes is 14 October 2010.
The bond offering, which was increased from the initially planned US$300m due to demand, closed on 9 September. The ten-year senior subordinated notes carry a coupon of 6.875% and priced at par. BoA Merrill Lynch and RBS were joint bookrunners.
ATK and Lockheed Martin were recently selected by NASA to become part of the agency’s Launch Services II contract. Using a modernised version of the Athena rocket, the two companies will launch a number of small Earth observation and scientific satellites into a low earth orbit (LEO) over the next ten years.
The total Launch Services II contract is potentially worth US$15bn up to 2020 and gives the space agency the ability to order a maximum of 70 launch services missions. The other companies selected to provide launch services are Orbital Sciences, SpaceX and United Launch Services.
