The largest change is a requirement that the SPAC not incur redemptions of 85% or more. The 23 SPACs that have completed transactions in 2022 and held their last vote this year faced redemptions of 83.8% on average, so this could be a close shave if Tailwind Two follows the recent trend.
The changes also remove a requirement that Terran Orbital hold no more than $40 million in net debt at the transaction’s close. At announcement, the deal foresaw Tailwind Two drawing on $75 million in term loans while repaying $70 million in past debt. So, this change could be a recognition of the possibility of lower proceeds for debt paydowns, but could also open the door for Tailwind Two to shore things up with new financing arrangements.
Tailwind Two shareholders are set to meet to vote on the transaction March 22, but the redemption deadline is Friday, March 18, so the parties should have a feel of the situation before the week is out.
The market has so far been encouraged by the deal changes with Tailwind Two trading up about 0.1% to $9.93 in the premarket. This is below its estimated pro rata trust value of $10.00, but nonetheless higher than much of the field of SPACs at a similar stage working towards close.
Tailwind Two initially announced its $1.6 billion combination with Terran Orbital on October 28. The Boca Raton, Florida-based company provides small satellite solutions for military, intelligence community, civil and commercial customers.