Item 1.01. Entry into a Material Definitive Agreement.
Indenture
On January 20, 2021, TransDigm Inc. ("TransDigm"), a wholly-owned subsidiary of
TransDigm Group Incorporated ("TransDigm Group"), issued $1,200 million in
aggregate principal amount of 4.625% Senior Subordinated Notes due 2029 (the
"Notes") at an issue price of 100% of the principal amount thereof in a private
offering to qualified institutional buyers in accordance with Rule 144A under
the Securities Act of 1933 (the "Securities Act") and to persons outside the
United States under Regulation S under the Securities Act.
The Notes were issued pursuant to an indenture, dated as of January 20, 2021
(the "Indenture"), among TransDigm, as issuer, TransDigm Group, TransDigm UK
Holdings plc ("TransDigm UK") and the other subsidiaries of TransDigm party
thereto, as guarantors, and The Bank of New York Mellon Trust Company, N.A., as
trustee.
The Notes bear interest at the rate of 4.625% per annum, which accrues from
January 20, 2021 and is payable in arrears on January 15 and July 15 of each
year, commencing on July 15, 2021. The Notes mature on January 15, 2029, unless
earlier redeemed or repurchased, and are subject to the terms and conditions set
forth in the Indenture.
TransDigm may redeem some or all of the Notes at the redemption prices and on
the terms specified in the Indenture. If TransDigm Group or TransDigm
experiences specific kinds of changes in control or TransDigm Group or any of
its restricted subsidiaries sells certain of its assets, then TransDigm must
offer to repurchase the Notes on the terms set forth in the Indenture.
The Notes are subordinated to all of TransDigm's existing and future senior
debt, rank equally with all of its existing and future senior subordinated debt
and rank senior to all of its future debt that is expressly subordinated to the
Notes. The Notes are guaranteed on a senior subordinated unsecured basis by
TransDigm Group, TransDigm UK and, other than immaterial subsidiaries and
certain other exceptions, all of TransDigm's existing and future U.S.
subsidiaries. The guarantees of the Notes are subordinated to all of the
guarantors' existing and future senior debt, rank equally with all of their
existing and future senior subordinated debt and rank senior to all of their
future debt that is expressly subordinated to the guarantees of the Notes. The
Notes are structurally subordinated to all of the liabilities of TransDigm's
non-guarantor subsidiaries.
The Indenture contains certain covenants that, among other things, limit
TransDigm's ability, and the ability of certain of its subsidiaries, to incur or
guarantee additional indebtedness or issue preferred stock, pay distributions
on, redeem or repurchase capital stock or redeem or repurchase subordinated
debt, make certain investments, engage in certain transactions with affiliates,
consummate certain assets sales, effect a consolidation or merger, or sell,
transfer, lease or otherwise dispose of all or substantially all assets, incur
or suffer to exist liens securing indebtedness and engage in certain business
activities. The Indenture contains events of default customary for agreements of
its type (with customary grace periods, as applicable) and provides that, upon
the occurrence of an event of default arising from certain events of bankruptcy
or insolvency with respect to TransDigm, all outstanding Notes will become due
and payable immediately without further action or notice. If any other type of
event of default occurs and is continuing, then the trustee or the holders of at
least 25% in principal amount of the then outstanding Notes may declare all
Notes to be due and payable immediately.
Registration Rights Agreement
In connection with the issuance of the Notes, TransDigm, TransDigm Group,
TransDigm UK, the other subsidiary guarantors party thereto, and Goldman Sachs &
Co. LLC and Morgan Stanley & Co. LLC, as representatives for the initial
purchasers listed therein, entered into a registration rights agreement relating
to the Notes, dated January 20, 2021 (the "Registration Rights Agreement").
Under the Registration Rights Agreement, TransDigm and the guarantors agreed,
for the benefit of the holders of the Notes, that they will file with the
Securities and Exchange Commission (the "SEC") within 210 days after the date
the Notes were issued, and use their reasonable best efforts to cause to become
effective within 300 days after the date the Notes were issued, one or more
registration statements (collectively, the "exchange offer registration
statement") relating to an offer to exchange the Notes for an issue of
SEC-registered notes with terms identical to the Notes (except that such
exchange notes will not be subject to restrictions on transfer or to any
increase in annual interest rate as described below).
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Pursuant to the Registration Rights Agreement, under certain circumstances,
including, if applicable, interpretations of the staff of the SEC, if TransDigm
is not permitted to effect the exchange offer, TransDigm and the guarantors have
agreed to use their reasonable best efforts to cause to become effective one or
more shelf registration statements (collectively, the "shelf registration
statement") relating to resales of the Notes and to keep such shelf registration
statement effective until the second anniversary of the date such shelf
registration statement becomes effective, or such shorter period that will
terminate when all Notes covered by such shelf registration statement have been
sold.
The Registration Rights Agreement provides that, if the exchange offer
registration statement is not filed on or prior to the 210th day after
January 20, 2021, the shelf registration statement is not filed within 60 days
after the date on which the obligation to file the shelf registration statement
arises, the exchange offer registration statement or, if required, the shelf
registration statement is not declared effective by the SEC on or prior to the
300th day after January 20, 2021, the exchange offer is not completed within 40
days after the effective date of the exchange offer registration statement (or,
if required, the shelf registration statement is not declared effective within
60 days after the filing of the shelf registration statement), or after either
the exchange offer registration statement or the shelf registration statement is
declared or becomes effective, such registration statement ceases to be
effective or usable, TransDigm will pay additional interest at the rate of $0.05
per week per $1,000 principal amount of transfer restricted Notes for the first
90-day period immediately following the occurrence of any of the foregoing, and
increasing by an additional $0.05 per week per $1,000 principal amount of
transfer restricted Notes for each subsequent 90-day period, up to a maximum
additional rate of 1.0% per annum thereafter until the exchange offer is
completed, the shelf registration statement is declared effective or the
obligation to complete the exchange offer and/or file the shelf registration
statement terminates, at which time the interest rate will revert to the
original interest rate on the date the Notes were originally issued.
The above summaries of the Indenture and the Registration Rights Agreement are
qualified in their entirety by reference to the Indenture and the Registration
Rights Agreement, which are attached hereto as Exhibits 4.1 and 4.3,
respectively, and are incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation.
The information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference into this Item 2.03.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
4.1 Indenture, dated as of January 20, 2021, among TransDigm Inc., as
issuer, TransDigm Group Incorporated, as a guarantor, the subsidiary
guarantors party thereto, and The Bank of New York Mellon Trust
Company, N.A., as trustee, relating to TransDigm Inc.'s 4.625% Senior
Subordinated Notes due 2029.
4.2 Form of 4.625% Senior Subordinated Notes due 2029 (included in
Exhibit 4.1).
4.3 Registration Rights Agreement, dated as of January 20, 2021, among
TransDigm Inc., as issuer, TransDigm Group Incorporated, as a
guarantor, the subsidiary guarantors party thereto, and Goldman
Sachs & Co. LLC and Morgan Stanley & Co. LLC, as representatives for
the initial purchasers listed therein.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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