8-KMaterial AgreementsFinancial EventsExhibits & Filings

NORTHROP GRUMMAN CORP /DE/ 8-K Report, Material Agreement (Dec 1, 2016)

Filed December 1, 2016For Securities:NOC

Summary

Northrop Grumman Corporation (NOC) filed an 8-K report on December 1, 2016, to announce the issuance of $750 million in aggregate principal amount of 3.200% Senior Notes due 2027. These notes were issued under an existing indenture, as supplemented by a seventh supplemental indenture executed on the same date. The issuance was facilitated by an Underwriting Agreement with Goldman, Sachs & Co. and J.P. Morgan Securities LLC. The new debt matures on February 1, 2027, and carries a fixed interest rate of 3.200%. The company retains the option to redeem the notes early, with specific redemption prices detailed in a prospectus supplement. The indenture includes standard covenants related to liens, sale and leaseback transactions, and asset sales, which are subject to certain exceptions and qualifications. This debt issuance is a material definitive agreement and creates a direct financial obligation for the company.

Key Highlights

  • 1Northrop Grumman issued $750 million in 3.200% Senior Notes due 2027.
  • 2The notes mature on February 1, 2027.
  • 3The company has the option to redeem the notes early at specified prices.
  • 4The issuance was conducted under an existing indenture, as amended by a seventh supplemental indenture.
  • 5Goldman, Sachs & Co. and J.P. Morgan Securities LLC acted as underwriters.
  • 6The filing reports the entry into a material definitive agreement and the creation of a direct financial obligation.
  • 7The company has an effective registration statement on Form S-3 filed previously.

Frequently Asked Questions

This 8-K filing is to report a material definitive agreement, specifically the issuance of $750 million in Senior Notes, and the creation of a direct financial obligation for Northrop Grumman.

The notes have an aggregate principal amount of $750 million, a fixed interest rate of 3.200% per annum, and mature on February 1, 2027. Northrop Grumman has the option to redeem the notes prior to maturity at prices detailed in the prospectus supplement.

The indenture governing the notes contains covenants that may restrict Northrop Grumman's ability to create liens, engage in certain sale and leaseback transactions, and undertake specific asset sales. However, these restrictions are subject to exceptions and qualifications.

This issuance increases Northrop Grumman's long-term debt by $750 million. The company will incur interest expense at a rate of 3.200% on this amount until the notes mature in 2027. The specific use of proceeds is not detailed in this filing, but typically such issuances are for general corporate purposes, acquisitions, or refinancing existing debt.