WOOD DALE – November 02, 2026 -- AAR CORP. (NYSE: AIR) priced $1.915 billion of senior notes in two tranches, 7.125% notes due 2031 and 7.375% notes due 2034, to help finance its pending acquisition of a controlling interest in MRO Holdings, Inc.
AAR splits the debt into $955 million and $960 million tranches
The 2031 Notes total $955 million at a fixed 7.125% annual rate and mature on November 15, 2031. The 2034 Notes total $960 million at a fixed 7.375% and mature on November 15, 2034. The offering is expected to close on November 17, 2026, subject to customary closing conditions.
Proceeds join equity and revolver borrowings in the MRO Holdings funding stack
AAR will combine the net proceeds with proceeds from a previously announced private placement of 2,215,791 shares of common stock and with borrowings under its Amended Revolving Credit Facility. The funds will pay the cash consideration for the MRO Holdings Acquisition.
The funds will also finance an intercompany term loan to MRO Holdings. That loan will refinance all outstanding debt under MRO Holdings' existing credit agreement, terminate all commitments under it, and release all related guarantees and liens. Remaining proceeds will cover premiums, fees and expenses tied to the deal and financing, plus working capital and general corporate purposes.
AAR will also issue equity with an agreed value of about $780.8 million as partial consideration for the acquisition.
Escrow and mandatory redemption apply if the notes close before the acquisition
If the offering closes before the MRO Holdings Acquisition is completed, gross proceeds of each series, less initial purchasers' discounts and commissions, go into segregated escrow accounts. They stay there until the escrow conditions tied to the acquisition closing are satisfied.
In that scenario, each series is also subject to a special mandatory redemption. The redemption price equals the initial issue price plus accrued and unpaid interest from the issue date to, but excluding, the redemption date. Neither mechanism applies if the offering closes substantially concurrently with the acquisition.
Subsidiary guarantees take effect only after the acquisition closes
Until the acquisition is completed and any escrowed proceeds are released, the Notes will not be guaranteed. After that point, or on the issue date if closing is concurrent, each of AAR's present and future wholly owned domestic subsidiaries that guarantee the Amended Revolving Credit Facility will guarantee the Notes. The guarantees will be full, unconditional, and joint and several, subject to certain exceptions.
Notes are limited to qualified institutional buyers and offshore investors
The Notes and guarantees are unregistered under the Securities Act of 1933. They will be offered only to qualified institutional buyers under Rule 144A and to certain non-U.S. persons in offshore transactions under Regulation S.