US defence and aerospace giant Lockheed Martin has raised US$2.25bn through a triple tranche long term senior unsecured bond offering.
The financing comprised US$750m of 2.9% notes due 2025, US$500m of 3.6% notes due 2035 and US$1bn of 3.8% notes due…
US defence and aerospace giant Lockheed Martin has raised US$2.25bn through a triple tranche long term senior unsecured bond offering.
The financing comprised US$750m of 2.9% notes due 2025, US$500m of 3.6% notes due 2035 and US$1bn of 3.8% notes due 2045. The 10-year notes priced at 99.714 to yield 2.933%, the 20-year notes priced at 99.138 to yield 3.661% and the 30-year notes priced at 98.92 to yield 3.861%.
Goldman Sachs, JP Morgan, Morgan Stanley, Citigroup, BofA Merrill Lynch and Wells Fargo were joint book-running managers on the offering.
Lockheed said that net proceeds would be used for general corporate purposes, including potential debt repayments, acquisitions and stock repurchases. In a research note, ratings agency Moody’s believes that Lockheed will likely use a portion of the financing to repay US$962m of long-term debt maturities that are due in 2016.
In summarising its Baa1 rating, Moody’s said: “As 2016 debt maturities are repaid, earnings begin to ramp and interest rates rise again, we expect Lockheed Martin’s financial leverage profile to trend towards the low-2x range or better on a Moody’s-adjusted Debt-to-EBITDA basis, a level more consistent with the anticipated strong-Baa/weak-A type of credit profile.”
