WOOD DALE, Ill. - AAR Corp (NYSE: NYSE:AIR), a major provider of aviation services, announced today its plans to offer $500M of senior notes due in 2029 through its subsidiary, AAR Escrow Issuer, LLC. The offering's completion is subject to market conditions and other factors.
The proceeds from this offering are earmarked to partially fund AAR's acquisition of the Product Support business from Triumph Group (NYSE: NYSE:TGI). To facilitate the remainder of the purchase, AAR intends to amend its existing revolving credit facility, raising its lending commitments from $620M to at least $795M. The company will also utilize cash on hand and additional borrowings under the amended credit facility to cover the acquisition costs.
Should the notes offering conclude before the acquisition is finalized, the funds will be held in escrow for the note holders until the acquisition's closing conditions are met. In this scenario, the notes are subject to a special mandatory redemption if the acquisition does not close. However, if the offering and acquisition close simultaneously, this escrow arrangement will not apply.
Before the acquisition's completion, the notes will be the sole responsibility of the Escrow Issuer. Following the acquisition, the Escrow Issuer will merge into AAR Corp, which will then assume the notes' obligations, with guarantees by the company's subsidiaries involved in the credit facility.
The notes and their guarantees will not be publicly registered, and are to be offered only to qualified institutional buyers and certain non-U.S. persons in accordance with specific securities regulations.
This move comes as AAR continues to expand its global footprint in the aerospace and defense aftermarket solutions industry. The company has cautioned that this press release contains forward-looking statements, and actual results could differ materially from those anticipated due to various risks and uncertainties.
The information provided is based on a press release statement from AAR Corp.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.