US-based aerospace components and systems manufacturer Moog has raised US$300m through a senior bond offering.
The company issued eight-year 5.25% senior notes at par in a private placement to institutional investors. The financing was upsized by US$50m…
US-based aerospace components and systems manufacturer Moog has raised US$300m through a senior bond offering.
The company issued eight-year 5.25% senior notes at par in a private placement to institutional investors. The financing was upsized by US$50m following strong demand.
Proceeds are to be used to repay outstanding borrowings under the company’s senior bank credit facility.
As of 31 October, Moog had US$321m of unused borrowing capacity on its US$1.1bn revolver due 2019 as well as an additional US$200m untapped accordion feature with its relationship banks that can be exercised at any time.
The company recently reported its fiscal 2014 results, with sales in its space and defence business flat year-on-year at US$395m.
However, the segment particularly suffered in the final quarter with sales down 6% compared to last year. That fall was predominantly driven by the space business where revenues were down 16%.
Explaining the fall, Moog chairman and CEO John Scannell said: “The weakness was all in the satellite markets, where we saw a slowdown in activity across our components, engines and avionics businesses. Our satellite business is going through a cyclical downturn at the moment, which we believe will extend into 2015.”
“We’ve seen this cycle in the past and we’re now adjusting our cost structure going forward in light of the lower sales outlook.”
To that end, in the fourth quarter the company broadened its ongoing restructuring actions to include the space and defence business. Moog subsequently incurred US$13m in restructuring charges in the quarter, mainly through severance costs.
The most notable of these was Jay Hennig, the president of Moog’s space and defence group. Hennig announced on 4 November his decision to voluntarily resign from the company to pursue other interests.
Hennig, who was a Moog employee for over 30 years, has been replaced on an interim basis by Maureen Kraus Athoe, the company’s group vice president and general manager of the space and defence unit.
