AAR Proposes $1.9 Billion Notes for MRO Deal
The aviation services company plans two senior-note series to help finance its controlling stake in MRO Holdings.
Updated on Nov. 2, 2026 in Corporate Finance
AAR proposed two senior-note series totaling $1.915 billion to finance its acquisition of a 65% controlling interest in MRO Holdings. The offering includes $955 million of notes due in 2031 and $960 million due in 2034.
Why it matters
The financing package shows how AAR plans to fund a roughly $4 billion enterprise-value deal through a mix of debt, stock and revolving credit. Debt-funded acquisitions of this size shift a company's leverage profile, making the terms of the notes and the closing conditions closely watched by investors.
The proposed notes carry pro forma assumed rates of 6.50% for the 2031 series and 6.75% for the 2034 series, against a $4 billion implied enterprise value for MRO Holdings. Final terms remain unset and depend on market conditions.
The players
AAR Corp.
AAR is a publicly traded aviation services company that provides aftermarket support, maintenance and distribution for commercial and government aircraft.
MRO Holdings
MRO Holdings is the aviation maintenance, repair and overhaul business whose controlling stake AAR is seeking to acquire.
The details
AAR would sell the notes to institutional buyers in transactions exempt from registration under Rule 144A, alongside a sale of 2,215,791 common shares and borrowings under its revolving-credit facility. Proceeds would be held in escrow if the notes close before the acquisition.
Timeline
Nov. 2, 2026: AAR announced the note offering plan.
February 2027: The acquisition is expected to close in AAR's fiscal third quarter, subject to regulatory approvals.
2031: First note series matures.
2034: Second note series matures.
Market Dynamics
The deal follows a sector pattern of consolidating maintenance, repair and overhaul providers through leveraged purchases of controlling stakes. Its financing mix of senior notes, stock and revolver borrowing reflects how acquirers in this market are combining debt markets with equity issuance.
Investors holding AAR shares or considering its senior notes face a new debt load of $1.915 billion alongside a dilutive stock sale. The final terms of the 2031 and 2034 notes will determine the cost of that debt for holders.
The takeaway
Debt-financed acquisitions like this one depend on final pricing, so readers tracking AAR should watch the terms set when the notes are priced. Compare the eventual coupon rates against the preliminary 6.50% and 6.75% assumptions.
What happens next
The acquisition is expected to close in AAR's fiscal third quarter ending February 2027, subject to regulatory approvals and customary closing conditions.
Further reading
Explore more on Corporate Finance to see how companies structure debt for acquisitions.
