Defence and aerospace giant Northrop Grumman has priced a US$2.85bn triple tranche bond offering. The company is selling US$850m of 1.75% senior notes due June 2018, US$1.05bn of 3.25% senior notes due August 2023, and US$950m of 4.75% senior notes due…
Defence and aerospace giant Northrop Grumman has priced a US$2.85bn triple tranche bond offering.
The company is selling US$850m of 1.75% senior notes due June 2018, US$1.05bn of 3.25% senior notes due August 2023, and US$950m of 4.75% senior notes due June 2043 in a fully underwritten public offering.
The 2018 notes priced at 99.724 to yield 1.808%, the 2023 notes at 99.462 to yield 3.312% and the 2043 notes at 99.904 to yield 4.756%.
Citigroup (left lead), JP Morgan, RBS, Wells Fargo, Deutsche Bank and Goldman Sachs were joint book-running managers on the issue.
The debt is rated Baa2 by Moody’s, BBB by Standard & Poor’s and BBB+ by Fitch.
Northrop stated that it expects to use net proceeds from the offering to fund the redemption of the US$350m outstanding of its 3.70% senior notes due 2014 and the US$500m outstanding of its 1.850% senior notes due 2015. The redemption date is 27 June 2013.
The remaining proceeds will be used to fund the previously announced share repurchase plan that will see the company retire approximately 25% of its share capital by 2015.
Northrop’s board recently approved the buyback of up to US$4bn of its stock in addition to the US$1bn that remains available to be repurchased under its previous programme.
Modular Space Vehicle a step closer
Meanwhile, on 28 May the company said that a Northrop-led team has recently completed the third gate review of its first Modular Space Vehicle (MSV) bus assembly, integration and test. This marks the completion of functional testing.
Northrop Grumman’s MSV spacecraft design is the first to implement a modular, rapidly reconfigurable architecture using open standards developed by an industry consortium in conjunction with the Air Force Research Laboratory and the Air Force’s Operationally Responsive Space (ORS) programme.
The intention is to have a capability that allows bus components and payload modules to plug into a central spacecraft network using standardised technology, akin to the way new hardware can be plugged into computers via USB ports.
Doug Young, vice president, Missile Defense and Advanced Missions, Northrop Grumman Aerospace Systems commented: “Completing these test processes will show that our design meets ORS’ programme objective requirements and moves the government closer to the launch of this first-of-its-kind vehicle that could revolutionize the way spacecraft are built.
“We are bringing network avionics technology to spaceflight and giving the nation an affordable option to respond to rapidly changing, multi-mission needs.”
Northrop is performing MSV-related study and hardware development under a five-year contract awarded in November 2010 by NASA’s Ames Research Center.
