Lockheed Martin in triple tranche note issue

Defence and aerospace giant Lockheed Martin has raised US$2bn through a triple-tranche bond offering.
The company issued US$500m of 2.125% senior unsecured notes due September 2016, US$900m of 3.35% senior unsecured notes due 2021 and US$600m of 4.85%…

Defence and aerospace giant Lockheed Martin has raised US$2bn through a triple-tranche bond offering.

The company issued US$500m of 2.125% senior unsecured notes due September 2016, US$900m of 3.35% senior unsecured notes due 2021 and US$600m of 4.85% senior unsecured notes due 2041.

Lockheed stated that proceeds are to be used to fund the redemption of the company’s US$500m senior 4.121% notes due 14 March 2013, with the remainder for general corporate purposes.

Citigroup, JP Morgan, Merrill Lynch, Morgan Stanley and Wells Fargo were joint book-running managers for the offering, while Credit Agricole, Goldman Sachs, Mitsubushi UFJ, Mizuho, UBS and US Bancorp Investments were joint lead managers. In addition, ANZ, Lloyds, RBC Capital Markets and SMBC Nikko Capital Markets acted as co-managers.

The 5-year notes priced at 99.924 to yield 2.141%, the 10-year notes at 99.73 to yield 3.382% and the 30-year notes 99.279 to yield 4.896%. The debt was rated Baa1 / A- / A-.

Hogan Lovells provided legal advice to Lockheed on the bond offering, while Davis Polk & Wardwell advised the lead bookrunners.

The financing came hot on the heels of Lockheed terminating its existing US$1.5bn revolving credit facility at the end of August and replacing it with a new five-year revolver of the same size.

The new facility, which includes a provision to increase it by an additional US$500m, is being provided by JP Morgan Chase, Citibank, RBS and Wells Fargo.