Research Update: Propulsion (BC) Finco, Owner Of Spanish Aero-Engine Supplier ITP, Rated 'B'; Outlook Stable

Propulsion (BC) Finco S.a.r.l. (Propulsion), a financing vehicle controlled by Bain Capital and minority investors, has acquired Industria de Turbo Propulsores, S.A. (ITP), a Spanish aerospace and defense supplier of modules and components, for a total consideration of €1.7 billion including transaction fees and expenses. ITP's new capital structure includes a $667 million senior secured term loan B (TLB), a $116 million revolving credit facility (RCF), and €1.1 billion in equity, of which €375 million is debt-like preferred equity certificates (PECs). We expect that ITP will continue to benefit from its position as a Tier 1 supplier of engine modules and components on high-growth engine platforms. In 2023, we anticipate leverage excluding debt-like PECs will reach about 6.5x. We anticipate

...- Propulsion (BC) Finco S.a.r.l. (Propulsion), a financing vehicle controlled by Bain Capital and minority investors, has acquired Industria de Turbo Propulsores, S.A. (ITP), a Spanish aerospace and defense supplier of modules and components, for a total consideration of 1.7 billion including transaction fees and expenses. ITP's new capital structure includes a $667 million senior secured term loan B (TLB), a $116 million revolving credit facility (RCF), and 1.1 billion in equity, of which 375 million is debt-like preferred equity certificates (PECs). - We expect that ITP will continue to benefit from its position as a Tier 1 supplier of engine modules and components on high-growth engine platforms. In 2023, we anticipate leverage excluding debt-like PECs will reach about 6.5x. - We anticipate moderately positive free operating cash flow (FOCF) in 2023. - We therefore assigned our 'B' long-term issuer credit rating to Propulsion and our 'B' issue rating to the company's senior secured TLB....

Research Update