Summary
On April 27, 2015, Harris Corporation (now L3Harris Technologies) announced the successful closing of a significant debt issuance totaling $2.4 billion across multiple tranches of notes with varying maturities and coupon rates. This strategic move included the sale of $500 million in 1.999% Notes due 2018, $400 million in 2.700% Notes due 2020, $600 million in 3.832% Notes due 2025, $400 million in 4.854% Notes due 2035, and $500 million in 5.054% Notes due 2045. In conjunction with this issuance, Harris Corporation also revealed its intention to redeem its outstanding 5.95% Senior Notes due 2017 and 6.375% Senior Notes due 2019. The proceeds from the new debt offering were utilized in part to satisfy requirements related to the merger agreement with Harris Communication Solutions (Indiana), Inc. and Exelis, and consequently, a 364-day bridge term loan commitment was reduced to zero. This series of transactions signals active capital management by Harris Corporation, aimed at optimizing its debt structure and funding strategic initiatives.
Key Highlights
- 1Harris Corporation closed a $2.4 billion debt offering across five new note issuances with maturities ranging from 2018 to 2045.
- 2The new notes carry interest rates from 1.999% to 5.054%, reflecting the company's cost of borrowing at the time.
- 3Proceeds from the debt issuance are linked to funding strategic merger activities, specifically with Harris Communication Solutions (Indiana), Inc. and Exelis.
- 4The company announced the redemption of its $400 million 5.95% Senior Notes due 2017 and $350 million 6.375% Senior Notes due 2019.
- 5The issuance under an automatic shelf registration statement indicates pre-filed documentation for efficient capital raising.
- 6A bridge term loan commitment was reduced to zero following the closing of the new note sales and escrow arrangements, suggesting a shift in financing strategy.