Harris Corp has netted US$700m via a dual tranche bond issue. Proceeds from the financing will predominantly be used to funding the company’s pending acquisition of Schlumberger’s Global Connectivity Services (GCS) business as well as to repay a portion…
Harris Corp has netted US$700m via a dual tranche bond issue. Proceeds from the financing will predominantly be used to funding the company’s pending acquisition of Schlumberger’s Global Connectivity Services (GCS) business as well as to repay a portion of its US$370m commercial paper program incurred primarily in connection with the summer purchase of CapRock Communications.
The communications group raised US$400m through ten-year 4.4% senior unsecured notes and US$300m in 6.15% thirty-year senior unsecured notes. The ten-year notes priced at 99.429 to yield 4.471% with a spread of 165bp over Treasuries. The thirty-year notes priced at 99.454 to yield 6.19% with a spread of 205bp over Treasuries. Interest is paid semi-annually, in June and December, for both bonds
JP Morgan, Merrill Lynch, Pierce, Fenner & Smith and Morgan Stanley were joint book-running managers for the transaction with Citigroup, HSBC and SunTrust Robinson Humphrey co-managers.
The debt is rated Baa1 by Moody’s and BBB+ by Standard & Poor’s.
On November 8, Harris announced the US$397.5m purchase of GCS and its intention to merge it with CapRock Communications, the satellite communications and network solutions provider that it acquired for US$525m in June 2010. Harris stated that it would finance both transactions through cash-in-hand, existing credit facilities and potentially the issue of new debt.
