8-KOther EventsExhibits & Filings

LOCKHEED MARTIN CORP 8-K Report, Corporate Update (May 19, 2020)

Filed May 19, 2020For Securities:LMT

Summary

Lockheed Martin Corporation (LMT) filed an 8-K on May 18, 2020, to report on a significant debt issuance that closed on May 15, 2020. The company successfully raised $1.15 billion in senior unsecured notes, split between $400 million of 1.850% Notes due 2030 and $750 million of 2.800% Notes due 2050. This offering was conducted under an effective registration statement and was supplemented by a final prospectus. Investors should note that the net proceeds from this offering are earmarked for strategic debt management. Approximately $400 million will be used to redeem a portion of its outstanding 3.35% Notes due 2021, and the remaining proceeds will be used to repay a portion of its 2.50% Notes due 2020. This move indicates proactive management of the company's debt profile, potentially optimizing interest expense and managing upcoming maturities.

Key Highlights

  • 1Lockheed Martin issued $1.15 billion in senior unsecured notes on May 15, 2020.
  • 2The issuance comprises $400 million of 1.850% Notes due 2030 and $750 million of 2.800% Notes due 2050.
  • 3Net proceeds will be used to redeem $400 million of 3.35% Notes due 2021.
  • 4Remaining proceeds will be used to repay a portion of the 2.50% Notes due 2020.
  • 5The debt was issued under Lockheed Martin's effective registration statement on Form S-3.
  • 6The notes are governed by an indenture with U.S. Bank National Association as trustee.
  • 7The filing includes the Underwriting Agreement and forms of the new notes as exhibits.

Frequently Asked Questions

Lockheed Martin issued these notes to refinance existing debt. Specifically, the proceeds will be used to redeem a portion of their 3.35% Notes due 2021 and to repay a portion of their 2.50% Notes due 2020.

The company issued $400 million of 1.850% Senior Notes due June 15, 2030, and $750 million of 2.800% Senior Notes due June 15, 2050. Interest will be paid semi-annually.

This issuance allows Lockheed Martin to manage its debt maturity profile, potentially lowering its overall cost of debt by replacing higher-coupon debt with lower-coupon debt and extending its debt maturity. It also indicates prudent financial management.

The company is using approximately $400 million to redeem a portion of its 3.35% Notes due 2021 and the remainder of the proceeds (over $750 million) to repay a portion of its 2.50% Notes due 2020. The total principal amount of notes being refinanced is the entire $1.15 billion raised.