Summary
Cummins Inc. (CMI) announced on August 24, 2020, the successful completion of a public offering that raised a total of $2.0 billion in aggregate principal amount across three series of senior notes: $500 million of 0.750% Senior Notes due 2025, $850 million of 1.500% Senior Notes due 2030, and $650 million of 2.600% Senior Notes due 2050. The company intends to utilize the net proceeds from this offering for general corporate purposes, which may include the repayment of outstanding commercial paper and the funding of working capital and capital expenditures. This debt issuance represents a significant financing event for Cummins, providing substantial liquidity. Investors should note the varying interest rates and maturity dates associated with each series of notes, offering flexibility in terms of duration and cost of capital. The company has also outlined provisions for the redemption of these notes, including potential make-whole premiums under certain conditions prior to maturity, and standard provisions for events of default.
Key Highlights
- 1Completion of a $2.0 billion public offering of Senior Notes.
- 2The offering comprises three tranches: $500M (0.750% due 2025), $850M (1.500% due 2030), and $650M (2.600% due 2050).
- 3Proceeds are earmarked for general corporate purposes, including commercial paper repayment and funding working capital/capital expenditures.
- 4Notes were issued under an Indenture dated September 16, 2013, as supplemented by three new indentures dated August 24, 2020.
- 5Specific redemption provisions are detailed, including a 'make-whole' premium if redeemed prior to specified dates before maturity.
- 6The offering is registered under the Securities Act of 1933 via a Form S-3 filing.