8-KMaterial AgreementsExhibits & Filings

CARPENTER TECHNOLOGY CORP 8-K Report, Material Agreement (Jun 30, 2011)

Filed June 30, 2011For Securities:CRS

Summary

Carpenter Technology Corporation (CRS) announced on June 30, 2011, the successful completion of a $250 million offering of 5.20% Senior Notes due 2021. This issuance was made under the company's existing shelf registration statement. The new notes carry a coupon rate of 5.20% and mature on July 15, 2021, with interest payments occurring semi-annually. The primary use of proceeds from this offering is to repay $100 million of its Series C medium-term notes due August 2011, which carry a higher interest rate of 7.625%. The remaining proceeds are earmarked for general corporate purposes, including working capital, capital expenditures, debt repayment, potential acquisitions, and stock repurchases. This strategic move aims to optimize the company's debt structure by refinancing a portion of its debt at a lower interest rate.

Key Highlights

  • 1Completed a $250 million offering of 5.20% Senior Notes due 2021.
  • 2The new notes will mature on July 15, 2021.
  • 3Interest rate on the new notes is 5.20% per annum, payable semi-annually.
  • 4Proceeds will be used to repay $100 million of 7.625% Series C medium-term notes due August 2011.
  • 5Remaining proceeds to be used for general corporate purposes, including working capital, capex, debt repayment, and potential strategic initiatives.
  • 6The notes are senior unsecured indebtedness, ranking equally with existing senior unsecured debt.
  • 7Company has the option to redeem notes prior to maturity under specified conditions, including a make-whole provision and a change of control event requiring a 101% repurchase price.

Frequently Asked Questions

The primary purpose is to refinance existing debt. Specifically, $100 million of the proceeds will be used to repay Carpenter Technology's 7.625% Senior Notes due August 2011, thereby lowering the company's overall interest expense.

The notes have an aggregate principal amount of $250 million, a fixed interest rate of 5.20% per annum, and mature on July 15, 2021. Interest is payable semi-annually in arrears on January 15 and July 15, commencing January 15, 2012.

The remaining net proceeds after repaying the Series C notes will be used for general corporate purposes. This includes potential additions to working capital, capital expenditures, further debt repayment, financing for acquisitions, joint ventures, or other business combination opportunities, and potential stock repurchases.

The 5.20% Senior Notes due 2021 are senior unsecured indebtedness. They rank equally in right of payment with all of Carpenter Technology's existing and future senior unsecured indebtedness and are senior to any future subordinated indebtedness.