Space communications systems developer L-3 Communications has raised US$500m through the issue of 3.95% 5-year senior unsecured notes.
Net proceeds from the offering, together with cash on hand, are to be used to redeem US$500m million of the…
Space communications systems developer L-3 Communications has raised US$500m through the issue of 3.95% 5-year senior unsecured notes.
Net proceeds from the offering, together with cash on hand, are to be used to redeem US$500m million of the company’s outstanding US$1bn aggregate principal amount of 6.375% senior subordinated notes due 2015.
The new notes, which were rated Baa3 by Moody’s, BBB- by S&P and BBB- by Fitch, priced at 99.273 to yield 4.113%, a spread of 325bp over treasuries.
Merrill Lynch, Pierce, Fenner & Smith, Barclays Capital, Deutsche Bank, Scotia Capital, SunTrust Robinson Humphrey and Wells Fargo are acting as joint book-running managers for the offering.
L-3 has approximately US$4.1bn of outstanding debt, none of which matures until 2015. The company’s liquidity as of 30 September 2011 was US$1.5bn, consisting of US$990m form a revolving credit facility (expiring in October 2012) and US$538m in cash and short-term investments.
On July 28, 2011, L-3 announced plans to spin-off part of its Government Services segment into a separate company called Engility. This transaction is expected to be completed in the middle of 2012.
It is thought that L-3 will receive a cash distribution estimated to be in the US$500m to US$650m range following the spin-off.
