Astronics Corporation (NASDAQ: ATRO) has announced the pricing of $150 million in aggregate principal amount of 5.500% convertible senior notes due 2030 (the “Notes”) in a private offering. The offering is being made to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended. Additionally, the initial purchasers have the option to buy up to an extra $15 million in Notes within 13 days of the initial issuance. The offering is expected to close on December 3, 2024, subject to customary closing conditions.
Key Terms of the Notes
- Maturity and Interest: The Notes are unsecured obligations maturing on March 15, 2030. They bear an annual interest rate of 5.500%, payable semi-annually on March 15 and September 15, starting March 15, 2025.
- Conversion Rights:
- Until December 15, 2029, conversion rights are triggered by specific events.
- After December 15, 2029, holders can convert the Notes at any time before the second trading day prior to maturity.
- Astronics may fulfill conversion obligations through cash, common stock, or a mix of both.
- Initial Conversion Rate: The initial conversion rate is 43.6814 shares per $1,000 principal amount, equivalent to a conversion price of approximately $22.89 per share—30% higher than the $17.61 closing price of Astronics’ stock on November 25, 2024. The conversion rate is subject to adjustments under certain conditions.
- Redemption Terms:
- Redemption is not permitted before March 20, 2028.
- On or after this date, Astronics may redeem the Notes, fully or partially, if the company’s stock price meets a specified threshold (130% of the conversion price).
- Repurchase Rights: If a “fundamental change,” as defined in the Notes’ indenture, occurs, holders may require Astronics to repurchase their Notes at 100% of the principal amount plus accrued interest.
Use of Proceeds
Astronics plans to allocate the proceeds to:
- Fully repay its term loan facility.
- Partially pay down its revolving credit facility.
- Cover fees and expenses related to the offering.
Offering Details
This private offering was made under Rule 144A of the Securities Act. The Notes and any shares of common stock issuable upon conversion have not been registered under the Securities Act or state securities laws, making them subject to restrictions on resale.
About Astronics
Astronics Corporation (NASDAQ: ATRO) serves the world’s aerospace, defense and other mission-critical industries with proven innovative technology solutions. Astronics works side-by-side with customers, integrating its array of power, connectivity, lighting, structures, interiors and test technologies to solve complex challenges. For over 50 years, Astronics has delivered creative, customer-focused solutions with exceptional responsiveness. Today, global airframe manufacturers, airlines, military branches, completion centers and Fortune 500 companies rely on the collaborative spirit and innovation of Astronics.