Zach's reported:
Triumph Group Inc. priced its senior notes recently. These notes priced equivalent to 99.270% of the face value and due 2018 aggregate $350 million and carry a coupon of 8.625% per annum.
The proceeds of the offer will be used to fund the acquisition of Vought Aircraft Industries Inc. Although, the Senior Notes will increase the net debt of Triumph, the acquisition will be accretive to earnings by 1 cent in the fiscal year 2010.
On March 23, Triumph decided to acquire Vought Aircraft Industries Inc. from a private equity firm, The Carlyle Group for $1.44 billion including the retirement of Vought debt.
Triumph will pay $525 million in cash and offer 7.5 million shares to Carlyle, which is expected to have a 31% stake in Triumph. The deal is expected to close by July 2010.
Vought owes the State of Texas $34.1 million plus interest for reneging on its promise of 3,000 new jobs. The Carlyle affiliate cut 35 positions from 2004-2009. Roughly 14% of Triumph's new notes would address the $48.3 million (principal + accumulated interest at 5% per year).
Unless The Carlyle Group makes Texas whole. That's not likely.
