DeCrane Aircraft is jumping back into the market to refinance about $320 million of existing debt. A new $365 million deal, led by Credit Suisse, comprises a six-year, $25 million revolver; a six-year, $180 million first-lien term loan and a seven-year, $160 million second-lien term loan. Pricing could not be determined.
"It's an old name that's just being retooled one more time," said one portfolio manager. "It's the same old story bring it back and reprice because they can." The Columbus, Ohio-based provider of aircraft components tapped the bank for $207.5 million of debt financing in 2005, according to Markit data. That deal consists of a $15 million revolver, a $116.5 million term loan and a $76 million second lien. The first lien is priced at LIBOR plus 4 1/4%. Pricing on the second lien could not be determined. DeCrane plans to use the new debt to refinance about $191 million outstanding on the 2005 debt, as well as about $130 million of subordinated and discount notes. Calls to Matthew Hughes, cfo, were not returned.
"They were having issues earlier in the 2000's," said another investor. "They sold out the good part of the business and were left with a more cyclical one," he said. DeCrane sold its Specialty Avionics Group to Odyssey Investment Partners in May 2003 for $147 million. TransDigm recently tapped CS and Bank of America to acquire the revamped supplier of electrical aircraft components now called Aviation Technologies from the private equity firm for $430 million (CIN, 1/26). DeCrane now provides aircraft cabin interior components, aircraft modification and refurbishment services and auxiliary fuel services for extended flight range.
Standard & Poor's rated the new bank facility's first lien B with a 1 recovery rating and assigned a CCC+ with a 3 recovery rating to the second lien. S&P noted the company's improved earnings and cash generation and improved liquidity from the proposed refinancing.