Triumph Group Inc. (TGI) recently decided to issue $375.0 million 4.875% senior secured notes with maturity scheduled in 2021. The proceeds from the issuance will be deployed to repay loans under the credit facilities along with the rest going towards general corporate purposes.
As of Dec 31, 2012, the debt-to-capital ratio for the company was 36.0%, which represented an increase of 80 basis points from 35.2% at the end of Sep 30, 2012. With the issuance of the $375.0 million debt, the debt-to-capital ratio is expected to increase further.
The new issuance would require Triumph to pay an annual interest of $18.3 million. Nevertheless, the company’s solid operational performance generates enough funds to service the debt uninterruptedly. Its interest expense in the third quarter shot up 15.3% year over year.
Last December, another aviation giant CAE Inc. (CAE) also offered $350 million aggregate principal amount of senior notes in a private placement. The proceeds from the issuance were intended to refinance existing debt.
In a separate release, Triumph declared a quarterly dividend payment of 4 cents on its shares; payable on Mar 15, 2013 to the shareholders as on Mar 1, 2013.
Around fifteen days back, Triumph reported mixed third quarter of fiscal 2013 earnings results. Earnings per share for the quarter came in at $1.46, an increase of 13.2% year over year. Also, revenue saw an increase of 7.8% year over year to rest at $890.6 million.
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