#USA #Senior Notes #Indianapolis #Allison #Dana Acquisition

Allison Transmission's Financial Strategy: A $1.7 Billion Funding Initiative

On November 6, 2025, Allison Transmission Holdings, Inc. (NYSE: ALSN) revealed a major financial move by pricing an offering that includes $500 million in senior notes and a $1.2 billion senior secured incremental term loan facility. This comprehensive funding announcement aims to support the company's acquisition strategy, specifically its intent to purchase Dana Incorporated's off-highway business.

Details of the Offerings

Senior Notes Offering

The offering comprises $500 million in 5.875% senior notes due in 2033. This initiative facilitates a private placement exempt from registration under the Securities Act of 1933. The issuance of these notes serves as a crucial financial instrument for Allison, aligning with its strategic goals. The proceeds are intended for financing the acquisition and covering related costs.

Incremental Term Loan Facility

In addition to the notes, Allison has secured a senior secured incremental term loan facility totaling $1.2 billion. This loan operates at a variable interest rate of Term SOFR plus 1.75%. The funds will not only enhance liquidity but will also assist in mitigating the expenses tied to the forthcoming acquisition.

Strategic Use of Proceeds

The proceeds from both financial instruments are earmarked for several vital purposes:
1. Acquisition Financing: The primary goal is to support the purchase of Dana's off-highway business operations, which will significantly expand Allison’s market share and operational capabilities.
2. Paying Related Costs: This funding will also cover various fees and costs associated with the acquisition process, ensuring that Allison can streamline this transaction effectively.
3. Future Operations: In addition to securing immediate needs, the company plans to leverage its substantial net cash flow from ongoing operations to sustain long-term growth and innovation initiatives post-acquisition.

Closing Timeline

The completion of the notes offering and the incremental term loan facility is anticipated around November 21, 2025, contingent upon customary closing conditions. Notably, the incremental loan facility is scheduled to close simultaneously with the completion of the Dana Business Acquisition.

Redemption Provision

An important clause in the notes offering specifies that if the acquisition does not finalize as planned, the notes will be subject to special mandatory redemption at par. This provision is designed to safeguard the interests of the noteholders while ensuring that Allison Transmission can manage risks associated with regulatory or operational delays.

Financial Outlook

Allison Transmission is recognized as a leader in the design and manufacturing of propulsion solutions for both commercial and defense vehicles. With a global reach into more than 150 countries, the company operates manufacturing facilities in the U.S., Hungary, and India, alongside regional headquarters in the Netherlands, China, and Brazil. The successful execution of the upcoming acquisitions promises to bolster Allison's existing portfolio, enhancing its competitive edge in the market.

In summary, Allison Transmission's proactive financial maneuvers highlight its commitment to growth and innovation within the commercial vehicle sector. The combination of the senior notes and incremental loan facility positions the company favorably to pursue its strategic expansion objectives effectively. Investors will be watching closely as Allison seeks to capitalize on these opportunities while navigating the complexities of the acquisition landscape.

For any inquiries regarding this financial offering or further information about Allison Transmission's operations, visit Allison Transmission's Website.