Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Hawker Beechcraft Hires Perella for Advice on Loan Amendment

Dec. 12 (Bloomberg) -- Hawker Beechcraft Corp., the jet maker part-owned by Goldman Sachs Group Inc., hired Perella Weinberg Partners LP as it seeks an amendment to the terms of its revolving credit line.

“We are entering a phase of our business during which we will likely need to address our revolving credit agreement which was last amended more than two years ago,” Nicole Alexander, a spokeswoman for the company, said in an e-mailed statement.

Hawker Beechcraft is close to violating the terms of its loans, which require its cash flow to grow, as the weakening global economy cuts demand for its business jets and its liquidity slides. It’s in the interest of the Wichita, Kansas-based company’s lenders to agree to loosen the covenants, according to Sam Goodyear, an analyst at CreditSights Inc. in New York.

“There’s a logical path to giving these guys a little more time,” Goodyear said today in a telephone interview. “If it was forced to liquidate right now, given all the macro uncertainty related to Europe, they’re probably not going to maximize their recoveries.”

The company’s $182.9 million of 8.5 percent notes due in April 2015 fell 0.8 cent to 18.5 cents on the dollar as of 10:28 a.m. in New York, the lowest in more than two years, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The bonds traded for as much as 60.3 cents in August.

Loan Terms

The loan terms require that the company make $112.5 million in adjusted earnings before interest, taxes, depreciation and amortization this year, Goodyear said. Hawker must also maintain $162.5 million of liquidity, or cash plus available credit, according to Goodyear.

Hawker Beechcraft is in compliance with the covenants, Alexander said in an e-mail. The company hired Perella Weinberg to seek adjustments in a “timely and effective manner,” Alexander said in e-mails. Alexander denied in a telephone interview that the company was planning an “imminent restructuring,” as Standard & Poor’s Leveraged Commentary & Data reported earlier today.

“We, like every other company in our aircraft market sectors, have experienced a large decrease in demand for our new aircraft products since 2008,” Alexander said in an e-mail. “We believe we are well balanced for market demand and production capacity going into 2012.”

Max Frumes, one of the reporters at S&P LCD who wrote the report, didn’t immediately return a telephone call seeking comment.

Goldman Sachs Capital Partners, the fifth-biggest U.S. bank’s private-equity arm, and Onex Corp. bought the company in 2007 for about $3.3 billion, giving the bank and Canada’s largest buyout firm equal stakes of 49 percent each.

To contact the reporter on this story: Zeke Faux in New York at zfaux@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.