2 Min Read
NEW YORK, Feb 11 (Reuters) - Wesco Aircraft Holdings Inc , a distributor of supply chain management services to the global aerospace industry, revealed details on plans to tap the leveraged loan markets to back its acquisition of Haas Group Inc, sources told Thomson Reuters LPC.
Wesco Aircraft Holdings is planning a $525 million term loan B. A bank meeting is scheduled for 10 a.m. on Wednesday in New York City.
Bank of America Merrill Lynch is lead left. Barclays, Morgan Stanley and RBC are to the right. The new $525 million, seven-year term loan B is expected to be covenant-lite.
West Chester, Pennsylvania-based Haas is a global provider of chemical supply chain management (CSCM) services to commercial aerospace, airline, military, energy and other markets.
At September 30, 2013, Wesco had a $200 million revolving line of credit and $568 million outstanding on its term loan A, both maturing on December 7, 2017.
The existing term loan A and revolver are being amended to stay in place, and to allow for the new $525 million term loan B, sources added.
The borrower on the credit will be Wesco Aircraft Hardware Corp.
On January 30, Wesco announced an agreement to acquire Haas for $550 million in cash from certain investment funds affiliated with The Jordan Company LP.
The company on Tuesday declined to comment further beyond that announcement and its February 5 quarterly earnings statements.
Proceeds of the new $525 million TLB, along with cash and drawings under the company's existing $200 million revolver, will be used to fund the acquisition, repay outstanding Haas debt, and pay fees and expenses, Wesco said in a company filing.
Moody's Investors Service placed Wesco Aircraft Hardware Corp's Ba3 Corporate Family Rating under review for downgrade following the acquisition agreement.
S&P has a BB- corporate credit rating on Wesco Aircraft Holdings Inc. The company was placed on CreditWatch with negative implications due to the debt-financed acquisition.