Summary
Northrop Grumman Corporation (NOC) filed an 8-K on November 8, 2010, to report on a significant debt issuance. The company successfully raised $1.5 billion by issuing three series of senior notes: $500 million in 1.850% Senior Notes due 2015, $700 million in 3.500% Senior Notes due 2021, and $300 million in 5.050% Senior Notes due 2040. These notes were issued under an existing indenture, as modified and supplemented by a new second supplemental indenture. The offering was facilitated through an underwriting agreement with Citigroup Global Markets Inc., J.P. Morgan Securities LLC, and RBS Securities Inc. These new unsecured senior notes rank equally with the company's other unsecured and unsubordinated debt. Investors should note that they will be effectively subordinated to any secured debt and to any debt or liabilities of Northrop Grumman's subsidiaries. This debt issuance likely serves to strengthen the company's liquidity position, potentially fund ongoing operations, capital expenditures, or acquisitions, and manage its overall capital structure. The specific use of proceeds is not detailed in this filing but is common for such large-scale debt offerings.
Key Highlights
- 1Northrop Grumman issued $1.5 billion in aggregate principal amount of senior notes across three tranches.
- 2The notes include $500 million of 1.850% Senior Notes due 2015.
- 3The notes include $700 million of 3.500% Senior Notes due 2021.
- 4The notes include $300 million of 5.050% Senior Notes due 2040.
- 5The issuance was made under an amended and supplemented indenture with The Bank of New York Mellon as Trustee.
- 6The notes are unsecured senior obligations, ranking equally with existing unsecured and unsubordinated debt.
- 7The notes will be effectively subordinated to secured indebtedness and to all indebtedness and liabilities of subsidiaries.