8-KMaterial AgreementsRegulation FDExhibits & Filings

CARPENTER TECHNOLOGY CORP 8-K Report, Material Agreement (Jun 28, 2011)

Filed June 28, 2011For Securities:CRS

Summary

Carpenter Technology Corporation (CRS) announced on June 28, 2011, the execution of an underwriting agreement to issue $250 million in aggregate principal amount of 5.20% Senior Notes due 2021. The offering, expected to close on June 30, 2011, represents a significant financing event for the company. The proceeds from this issuance are earmarked for strategic financial management. A substantial portion, $100 million, will be used to repay existing medium-term notes maturing in August 2011. The remaining funds are designated for general corporate purposes, including working capital, capital expenditures, further debt repayment, potential acquisitions, and stock repurchases, indicating a proactive approach to optimizing the company's capital structure and pursuing growth opportunities.

Key Highlights

  • 1Entry into a material definitive agreement for the issuance of $250 million in 5.20% Senior Notes due 2021.
  • 2The offering is expected to be completed on June 30, 2011.
  • 3Proceeds will be used to repay $100 million of Series C medium-term notes maturing in August 2011.
  • 4Remaining proceeds will be allocated to general corporate purposes, including working capital, capital expenditures, and potential business development.
  • 5The offering was registered under the Securities Act of 1933 via a Form S-3 registration statement.
  • 6Underwriting services were provided by J.P. Morgan Securities LLC and Merrill Lynch, Pierce Fenner & Smith Incorporated.
  • 7The company has agreed to customary indemnification clauses for the underwriters.

Frequently Asked Questions

The primary purpose is to refinance existing debt and strengthen the company's capital structure. Specifically, $100 million will be used to repay the 7.625% Series C medium-term notes due August 2011, with the remainder allocated for general corporate purposes.

The new Senior Notes will carry a fixed interest rate of 5.20% and are due in 2021.

This offering allows the company to reduce its overall interest expense by replacing higher-cost debt (7.625% notes) with lower-cost debt (5.20% notes). It also provides financial flexibility for future investments, working capital needs, and potential strategic initiatives.

The underwriters are J.P. Morgan Securities LLC and Merrill Lynch, Pierce Fenner & Smith Incorporated, acting as representatives for a group of several underwriters.