US aerospace and defence contractor Raytheon has raised US$600m in a dual tranche senior unsecured bond offering.
The company issued US$300m of 3.15% notes due 2024 and US$300m of 4.2% notes due 2044. The 10 year notes priced at 99.37 to yield 3.17%,…
US aerospace and defence contractor Raytheon has raised US$600m in a dual tranche senior unsecured bond offering.
The company issued US$300m of 3.15% notes due 2024 and US$300m of 4.2% notes due 2044. The 10 year notes priced at 99.37 to yield 3.17%, while the 30 year notes priced at 99.25 to yield 4.23%.
BofA Merrill Lynch, JP Morgan, Citigroup and Credit Suisse were joint bookrunning managers on the offering.
Raytheon said that it planned to use net proceeds for general corporate purposes, including discretionary pension contributions. As of year-end 2013, Raytheon had a pension deficit of around US$3.3bn, though 86% of that was funded.
According to a research note by ratings agency Fitch, Raytheon’s total long-term debt, including the current offering, is US$5.3bn. The company’s leverage will therefore deteriorate to approximately 1.5x debt to EBITDA by the end of 2014.
In early November, Raytheon announced the acquisition of local special operations and cybersecurity firm Blackbird Technologies for around US$420m. That deal is expected to be funded through existing cash. The company has more than US$3bn in cash balances and is anticipated to generate at least US$1bn in free cash flow in 2014.
