Aerospace and defence products maker Alliant Techsystems (ATK) is seeking a new term loan of at least US$100m to partially fund its cash tender offer for the US$196m outstanding of 3% convertible senior subordinated notes due 2024.
The redemption is…
Aerospace and defence products maker Alliant Techsystems (ATK) is seeking a new term loan of at least US$100m to partially fund its cash tender offer for the US$196m outstanding of 3% convertible senior subordinated notes due 2024.
The redemption is required under the terms of the company’s US$5bn merger with Orbital Sciences, which is expected to close by the end of the year.
However, despite the notes being callable from 20 August 2014, ATK president and CEO Mark DeYoung said the company had chosen to settle them early.
DeYoung said: “While we are obligated to settle these notes before the anticipated completion of the Orbital Sciences transaction, taking this action now reaffirms our expectation of delivering operational excellence, earnings growth, and shareholder value this year. We expect the retirement of the notes will be accretive to earnings per share for the full fiscal year.”
The tender offer expires 27 June 2014 and is not subject to any minimum tender condition but is subject to a financing condition.
As well as using proceeds from the planned incremental term loan, ATK intends to fund the repurchase through cash on hand and borrowings from its existing revolving credit facility.
BofA Merrill Lynch is acting as dealer manager for the tender offer.
