Yesterday, Triumph Group, Inc. (TGI) priced its previously announced offering of $175 million aggregate principal amount of senior subordinated notes due in 2017. The notes will have an interest rate of 8% per annum and are being issued at a price equal to 98.56% of their face value. The offering of the notes is expected to close on Nov 16, 2009.
 
The net proceeds from the offering is expected to be approximately $168.5 million after deducting the effects of original issue discount, initial purchaser discounts and estimated offering fees and expenses. The net proceeds from the issuance of the notes are to be used for general corporate purposes, which may include debt reduction, including the repayment of amounts outstanding under its revolving credit facility at a future date, without any permanent reduction of the commitments there under.
 
The notes will be issued and guaranteed on a senior subordinated basis by each of the company’s domestic restricted subsidiaries. Those subsidiaries will guarantee any of its debt or that of its restricted subsidiaries under the company’s revolving credit facility and in the future by any of the company’s domestic restricted subsidiaries that guarantee any debt of the company or any of its restricted subsidiaries incurred under any credit agreement.
 
Triumph, which serves a broad, worldwide spectrum of the aviation industry, is likely to get adversely affected by the weak commercial OEM market in the coming months. Moreover, the intense competition in the aerospace is likely to have an unfavorable impact on the company. We maintain our Underperform rating on the stock based on the belief that there will be no significant recovery in the delivery of new commercial aircraft in the medium term.
Read the full analyst report on “TGI”
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