Summary
Parker-Hannifin Corporation (PH) filed an 8-K on June 8, 2022, to announce the pricing of a significant debt offering. The company successfully priced $3.6 billion in aggregate principal amount of senior notes across three tranches: $1.4 billion due 2024, $1.2 billion due 2027, and $1.0 billion due 2029, with annual interest rates ranging from 3.650% to 4.500%. This offering is a key component in financing Parker-Hannifin's proposed acquisition of Meggitt plc. The proceeds from this debt issuance, combined with other funding sources including a term loan facility, commercial paper, and cash on hand, are earmarked for the Meggitt acquisition. The filing also includes a critical contingency: if the Meggitt acquisition does not close by April 3, 2023, or if the cooperation agreement is terminated prior to that date, the Notes will be subject to a special mandatory redemption at 101% of their principal amount plus accrued interest. This highlights the direct link between the success of the Meggitt acquisition and the terms of this debt issuance.
Key Highlights
- 1Parker-Hannifin priced a $3.6 billion senior notes offering across three maturities: 2024 ($1.4B), 2027 ($1.2B), and 2029 ($1.0B).
- 2The notes carry interest rates of 3.650% (2024), 4.250% (2027), and 4.500% (2029).
- 3The primary purpose of the debt offering is to finance the proposed acquisition of Meggitt plc.
- 4Proceeds will be combined with other funding sources, including a delayed-draw term loan, commercial paper, and cash on hand.
- 5A special mandatory redemption clause is included: if the Meggitt acquisition is not completed by April 3, 2023, the notes will be redeemed at 101% of principal plus accrued interest.
- 6The offering is registered under the Securities Act of 1933, with a final Prospectus Supplement filed on June 8, 2022.