Summary
L3Harris Technologies (LHX) announced on December 14, 2020, the full redemption of its 4.950% Senior Notes due February 15, 2021. These notes had an aggregate principal amount of $650 million. The redemption price paid was approximately $660.6 million, which includes accrued interest. This action effectively terminates and cancels the outstanding notes.
Key Highlights
- 1Full redemption of $650 million in 4.950% Senior Notes due February 15, 2021.
- 2The company exercised its option to redeem the notes, as previously announced on November 12, 2020.
- 3Total payment for the redemption was approximately $660.6 million, inclusive of accrued interest.
- 4The redemption effectively cancels and terminates the outstanding senior notes.
- 5This action is related to managing the company's debt obligations prior to the maturity date.
Frequently Asked Questions
The primary event is L3Harris Technologies' full redemption of its $650 million aggregate principal amount of 4.950% Senior Notes due February 15, 2021.
The total cost for the redemption was approximately $660.6 million, which includes the principal amount and any accrued and unpaid interest up to the redemption date.
While the filing doesn't explicitly state the 'why', companies typically redeem debt early to manage their capital structure, take advantage of favorable market conditions, or eliminate interest expenses if they have sufficient cash or can refinance at a lower rate. This action was pre-announced, indicating a strategic decision.
The redemption reduces the company's outstanding debt by $650 million and will result in a cash outflow of approximately $660.6 million. This impacts liquidity but also removes future interest payments associated with these notes.