High-tech engineering firm ITT Group has closed a US$1.7bn refinancing as part of the completion of its spin-off transaction into three separate publically traded companies.
The debt financing comprises three separate revolving credit facilities and is…
High-tech engineering firm ITT Group has closed a US$1.7bn refinancing as part of the completion of its spin-off transaction into three separate publically traded companies.
The debt financing comprises three separate revolving credit facilities and is split between a US$500m 4-year revolver for ITT Corp, a US$600m 4-year revolver for the newly created defence & information solutions business ITT Exelis and a US$600m 4-year revolver for water technology firm ITT Xylem.
The ITT Corp loan has a margin of 130bp over Libor and was provided by JP Morgan, Citigroup and US Bank. Exelis’s revolver pays 110bp over Libor and was arranged by JP Morgan, Citigroup and RBS, while Xylem’s facility also pays 110bp over Libor and was lead by JP Morgan, Citigroup, Barclays and Societe Generale.
The debt financing comes hot on the heels of a US$1.85bn bond offering that the two newly-spun out companies completed at the end of September. That deal saw Exelis raise US$650m via a dual tranche note issue and Xylem US$1.2bn through two bonds of US$600m each. Proceeds were used to pay a portion of a special cash distribution to the parent company with the remainder used for general corporate purposes.
The spin-off transactions were completed at the end of October with both Exelis and Xylem commencing trading on the New York Stock Exchange from 1 November.
Exelis has already been the subject of rumours that it might be a takeover target since its separation. Media reports citing industry insiders have claimed that both Raytheon and BAE Systems have been eyeing up the business, although at the moment this remains speculation.
The Exelis business includes the company’s space-based satellite imaging, GPS-based positioning and navigation and imaging systems operations. This unit also includes ITT Geospatial Systems, which is contracted to build the imaging payload for both the GeoEye-1 and WorldView-3 satellites.
