LMI Aerospace Said to Set Rate on $225 Million Loan for Valent

LMI Aerospace Inc. (LMIA), a supplier of structural components for the aerospace and defense industries, set the rate it will pay on a $225 million term loan B backing its acquisition of Valent Aerostructures LLC, according to a person with knowledge of the transaction.

The debt will pay interest at 4 percentage points to 4.25 percentage points more than the London interbank offered rate, said the person, who asked not to be identified because the information is private. Libor, a rate banks say they can borrow in dollars from each other, will have a 1.25 percent floor.

LMI Aerospace is proposing to sell the loan at 99 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.

Lenders are being offered one-year soft-call protection of 101 cents, meaning the company would have to pay 1 cent more than face value to refinance the debt during the first year, the person said.

Royal Bank of Canada and Wells Fargo & Co. are arranging the financing for the St. Louis-based company which also includes a $100 million revolving line of credit, according to data compiled by Bloomberg.

LMI Aerospace is acquiring all the outstanding equity of Wichita, Kansas-based Valent for $237 million, according to a Dec. 31 press release.

To contact the reporter on this story: Michael Amato in New York at mamato3@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net

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