US aerospace and defence contractor General Dynamics has priced a triple tranche bond offering of senior unsecured notes.
The financing comprises US$900m of 1% notes due 2017, US$1bn of 2.25% notes due 2022, and US$500m of 3.6% notes due 2042.
The 2017…
US aerospace and defence contractor General Dynamics has priced a triple tranche bond offering of senior unsecured notes.
The financing comprises US$900m of 1% notes due 2017, US$1bn of 2.25% notes due 2022, and US$500m of 3.6% notes due 2042.
The 2017 notes priced at 99.376 to yield 1.128%, the 2022 notes at 98.987 to yield 2.36% and the 2044 notes at 99.580 to yield 3.623%.
Joint bookrunning managers on the transaction are BofA Merrill Lynch, JP Morgan, RBS and Wells Fargo. Senior co-managers were Williams Capital Group, Lloyds Securities, Mitsubishi UFJ Securities, Mizuho Securities and US Bancorp Investments.
The company stated that proceeds are to be used, alongside cash on hand, to redeem its US$1bn outstanding of 4.25% notes due May 2013, its US$1bn 5.25% notes due 2014, and US$400m of 5.375% notes due 2015.
General Dynamics, which is rated A2 by Moody’s and A by both Standard & Poor’s and Fitch, has approximately US$3.9bn of outstanding debt.
The company has followed an aggressive bolt-on acquisition strategy over the past couple of years, buying five businesses during the first three quarters of 2012 and six businesses in 2011 for a total of around US$2bn.
With the majority of these purchases having been funded through available cash, the acquisition strategy has not impacted the company’s leverage ratio, which as of October 2012 was approximately 0.9 times debt to EBITDA. In the last 12 months, ending in the second quarter of 2012, General Dynamics generated US$2.1bn in free cash flow.
