Item 1.01Item 1.01 - Entry into Material Agreement
Item 1.01. Entry into a Material Definitive Agreement.
Completed Financing Summary
On February 13, 2026, TransDigm Inc. (“TransDigm”), a wholly-owned subsidiary of TransDigm Group Incorporated (“TD Group”), completed the previously announced offerings of an aggregate of $2,000 million of new debt, consisting of $1,200 million of 6.125% Senior Subordinated Notes maturing July 31, 2034 (the “Notes”) and $800 million of new tranche N term loans (the “New Term Loans”) maturing February 13, 2033.
TD Group intends to use the net proceeds of the offerings of the Notes and the New Term Loans, together with cash on hand, to fund the aggregate purchase price of the previously announced and expected acquisitions of (i) Stellant Systems, Inc. and (ii) Jet Parts Engineering and Victor Sierra Aviation Holdings and for related transaction fees and expenses.
Subordinated Notes Indenture
On February 13, 2026, TransDigm issued $1,200 million in aggregate principal amount of the Notes at an issue price of 100.000% of the principal amount thereof in a private offering to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933 (the “Securities Act”) and to non-U.S. persons outside the United States under Regulation S under the Securities Act.
The Notes were issued pursuant to an indenture, dated as of February 13, 2026 (the “Indenture”), among TransDigm, as issuer, TD Group and the subsidiaries of TransDigm party thereto, as guarantors, and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”).
The Notes bear interest at the rate of 6.125% per annum, which accrues from February 13, 2026 and is payable in arrears on January 31 and July 31 of each year, commencing on July 31, 2026. The Notes mature on July 31, 2034, 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 TD Group or TransDigm experiences specific kinds of changes in control or TD 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 TransDigm’s senior subordinated obligations. As of the issue date, the Notes are guaranteed, on a senior subordinated basis, by TD Group and each of TransDigm’s direct and indirect restricted subsidiaries that is a borrower or guarantor under TransDigm’s senior secured credit facilities. From and after the issue date, the Notes will be guaranteed, with certain exceptions, on a senior subordinated basis by TD Group and each of TransDigm’s direct and indirect restricted subsidiaries that is a borrower or guarantor under TransDigm’s senior secured credit facilities or that issues or guarantees any capital markets indebtedness of TransDigm or any of the guarantors in an aggregate principal amount of at least $200 million. The Notes and the related guarantees rank junior in right of payment with all of TransDigm’s and the guarantors’ existing and future senior indebtedness, equally in right of payment to any of TransDigm’s and the guarantor’s existing and future senior subordinated indebtedness, senior in right of payment to any of TransDigm’s and the guarantors’ existing and future indebtedness that is, by its terms, expressly subordinated in right of payment to the Notes and related guarantees, and 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.
The above summary of the Indenture is qualified in its entirety by reference to the Indenture, which is attached hereto as Exhibit 4.1 and is incorporated herein by reference.
Credit Agreement Amendment
On February 13, 2026, TransDigm, TD Group and certain subsidiaries of TransDigm entered into Amendment No. 20 and Incremental Term Loan Assumption Agreement (the “Credit Agreement Amendment”), pursuant to which TransDigm, among other things, incurred $800 million of the New Term Loans. The New Term Loans bear interest at a rate of Term SOFR plus an applicable margin of 2.50%. Original issue discount of 0.125% was paid to lenders of the New Term Loans. The other terms and conditions that apply to the New Term Loans are substantially the same as the terms and conditions that apply to the other term loans outstanding under the Credit Agreement. The New Term Loans were fully drawn on February 13, 2026.
The Credit Agreement Amendment amends that certain Second Amended and Restated Credit Agreement, dated June 4, 2014, as amended, with Goldman Sachs Bank USA, as administrative agent and collateral agent, and the other agents and lenders named therein (the “Credit Agreement”).
The above summary of the Credit Agreement Amendment is qualified in its entirety by reference to the Credit Agreement Amendment, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.