Summary
Lockheed Martin Corporation (LMT) filed an 8-K on May 25, 2010, reporting the issuance of $728.191 million in new 5.72% Notes due 2040. These new notes were primarily issued in exchange for a portion of the company's outstanding older debt securities through an exchange offer that commenced on April 26, 2010, and expired on May 21, 2010. This debt exchange represents an active management of Lockheed Martin's capital structure, likely aimed at optimizing its interest expense and maturity profile. The exchange offer was targeted towards "qualified institutional buyers" and non-U.S. persons, indicating a strategic approach to debt financing. The new notes are general unsecured obligations and rank equally with existing unsecured and unsubordinated debt, but are effectively junior to secured debt and subordinated to subsidiary debt. The company has also entered into a registration rights agreement to facilitate the eventual registration of these notes or an exchange for registered notes, providing liquidity and compliance for investors.
Key Highlights
- 1Issuance of $728,191,000 aggregate principal amount of new 5.72% Notes due 2040.
- 2The new notes were issued in exchange for a portion of existing outstanding debt (old notes).
- 3The exchange offer commenced on April 26, 2010, and expired on May 21, 2010.
- 4Participation was limited to "qualified institutional buyers" and non-U.S. persons.
- 5The new notes mature on June 1, 2040, with semi-annual interest payments on June 1 and December 1.
- 6The new notes are general unsecured obligations, ranking equally with other unsecured and unsubordinated debt.
- 7Lockheed Martin entered into a registration rights agreement to register the new notes or offer an exchange for registered notes.