Allison Transmission, Inc. Announces Cash Tender Offer for Its 11.25% Senior Toggle Notes Due 2015

INDIANAPOLIS, April 15, 2011 /PRNewswire/ -- Allison Transmission, Inc. announced today that it has commenced a cash tender offer to purchase any and all of its outstanding 11.25% Senior Toggle Notes due 2015 (referred to below as the "notes"). The tender offer is being made pursuant to an "Offer to Purchase" dated today, which sets forth a more comprehensive description of the terms of the offer. The table below sets forth information with respect to the notes and the tender offer.

1. Per $1,000 principal amount of notes validly tendered and accepted for purchase.
2. Inclusive of the Early Tender Payment.

The tender offer is scheduled to expire at midnight, New York City time, on May 12, 2011, unless extended on the terms described in the Offer to Purchase.  Holders of notes must tender and not withdraw their notes at or before the "Early Tender Date," which is 5:00 p.m., New York City time, on April 26, 2011, unless extended, to receive the "Total Consideration."

The Total Consideration payable for each $1,000 principal amount of notes validly tendered and not validly withdrawn on or prior to the Early Tender Date and accepted for payment is equal to $1,107.50, which will be payable promptly after the Early Acceptance Date, on the "Early Settlement Date."  Holders who tender their notes after the Early Tender Date will receive the "Tender Offer Consideration," which is the Total Consideration minus an "Early Tender Payment" of $30.00 per $1,000 principal amount of notes, which will be payable promptly following the expiration date, on the "Final Settlement Date."  In addition to the Total Consideration or Tender Offer Consideration, as applicable, holders of notes accepted for payment will receive accrued and unpaid interest from the last interest payment date for the notes to, but not including, the applicable settlement date.

Except as required by applicable law, notes tendered may be withdrawn only at or before the "Withdrawal Date," which is 5:00 p.m., New York City time, on April 26, 2011, and notes tendered after the Withdrawal Date and before the expiration of the tender offer may not be withdrawn.

It is anticipated that the Early Settlement Date for notes validly tendered on or before the Early Tender Date and accepted for purchase by Allison will be promptly following the Early Acceptance Date.  It is anticipated that the Final Settlement Date for notes validly tendered on or before the expiration date and accepted for purchase by Allison will be May 13, 2011.

Allison has retained Citigroup Global Markets Inc., Barclays Capital, Deutsche Bank Securities and UBS Securities LLC to serve as dealer managers for the tender offer. Allison has retained Global Bondholder Services Corporation to serve as the depositary and as the information agent for the tender offer. Requests for documents may be directed to Global Bondholder Services Corporation by phone at (866) 389-1500 or (212) 430-3774 or in writing at 65 Broadway, Suite 404, New York, New York 10006.  Questions regarding the tender offer may be directed to Citigroup Global Markets Inc. at (800) 558-3745 or collect at (212) 723-6106, to Barclays Capital at (800) 438-3242 or collect at (212) 528-7581, to Deutsche Bank Securities Inc. at (855) 287-1922 or collect at (212) 250-7527 or to UBS Securities LLC at (888) 719-4210 or collect at (203) 719-4210.

The tender offer is subject to the satisfaction of certain conditions, including completion of a debt financing on terms and conditions satisfactory to Allison sufficient to fund the repurchase of all notes tendered, including the payment of all accrued interest and costs and expenses incurred in connection therewith. If any of the conditions is not satisfied, Allison is not obligated to accept for payment, purchase or pay for, and may delay the acceptance for payment of, any tendered notes, in each event subject to applicable laws, and may terminate the tender offer. The tender offer is not conditioned on the tender of a minimum principal amount of notes. Allison is not soliciting consents from holders of notes in connection with the tender offer.

If not all notes are validly tendered pursuant to the tender offer, Allison currently intends, but is not obligated to, redeem or repurchase any untendered notes in accordance with the indenture governing the notes.

This press release is for information purposes only and is neither an offer to purchase nor a solicitation of an offer to sell the notes or any other securities. The tender offer is made only by and pursuant to the terms of the Offer to Purchase and the related Letter of Transmittal and the information in this press release is qualified by reference to the Offer to Purchase and the related Letter of Transmittal. The tender offer is not being made to holders of notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.  None of Allison, the dealer managers or the depositary and information agent makes any recommendations as to whether holders should tender their notes pursuant to the tender offer. Holders must make their own decisions as to whether to tender notes, and, if so, the principal amount of notes to tender.

Allison's principal executive offices are located at 4700 West 10th Street, Indianapolis, Indiana 46222 and its telephone number is (317) 242-5000.  Allison's internet address is www.allisontransmission.com.

SOURCE Allison Transmission, Inc.

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