8-KMaterial AgreementsFinancial EventsExhibits & Filings

L3HARRIS TECHNOLOGIES, INC. /DE/ 8-K Report, Material Agreement (Dec 5, 2007)

Filed December 5, 2007For Securities:LHX

Summary

L3Harris Technologies, Inc. (formerly Harris Corporation) announced on December 4, 2007, the closing of a $400 million aggregate principal amount offering of its 5.95% Notes due 2017. The net proceeds to the company from this issuance, after deducting underwriting discounts and expenses, were approximately $386 million. These notes were issued under an automatic shelf registration statement and are governed by an indenture with The Bank of New York as trustee. The issuance of these senior notes represents a material definitive agreement that adds to the company's long-term debt. Investors should note the interest rate of 5.95% and the maturity date of December 1, 2017. The notes are subject to redemption at the company's option at a "make whole" price and may be subject to a mandatory repurchase under specific change of control and credit rating downgrade conditions.

Key Highlights

  • 1Harris Corporation successfully closed a $400 million offering of 5.95% Notes due 2017.
  • 2Net proceeds from the offering amounted to approximately $386 million after fees and expenses.
  • 3The notes mature on December 1, 2017.
  • 4Interest on the notes is payable semi-annually at a rate of 5.95% per year.
  • 5The company has the option to redeem the notes early at a 'make whole' price.
  • 6A change of control event coupled with a below investment grade rating could trigger a mandatory repurchase offer at 101% of par.

Frequently Asked Questions

The 8-K filing does not explicitly state the purpose of the $400 million note offering. However, such offerings are typically used for general corporate purposes, including funding operations, capital expenditures, debt repayment, or strategic initiatives.

The notes have a principal amount of $400 million, bear interest at 5.95% annually, payable semi-annually, and mature on December 1, 2017. The company can redeem them at a 'make whole' price, and a change of control event with a credit downgrade can trigger a 101% repurchase offer.

The 'make whole' redemption provision allows Harris Corporation to retire the debt early. However, it typically requires the company to pay bondholders an amount that compensates them for the remaining interest they would have received if the bonds had matured as scheduled, plus a premium. This means early redemption can be costly for the issuer.

The change of control provision offers bondholders protection. If the company undergoes a significant change in ownership or control, and its credit rating falls below investment grade, bondholders have the right to sell their notes back to the company at a premium (101% of face value plus accrued interest), mitigating their risk in a potentially unstable situation.