Harris Corp has netted US$700m via a dual tranche bond issue. Proceeds from the financing will predominantly be used to help fund the company’s pending acquisition of Schlumberger’s Global Connectivity Services (GCS) business as well as to repay a…
Harris Corp has netted US$700m via a dual tranche bond issue. Proceeds from the financing will predominantly be used to help fund 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.
JPMorgan, 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.
