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Caterpillar Inc. (CAT), the world’s largest maker of construction equipment, sold $1.5 billion of three-, five- and 10-year bonds, according to data compiled by Bloomberg.
The tractor manufacturer’s financing arm Caterpillar Financial Services Corp. sold equal portions of $500 million of 1.1 percent bonds maturing 2015 that yielded 70 basis points more than similar-maturity Treasuries, 1.625 percent five-year notes with a 90 basis-point spread and 2.85 percent securities due in 2022 to yield 110 basis points more than benchmarks, Bloomberg data show.
The new debt is expected to be graded (CAT) A2 by Moody’s Investors Service. Proceeds from the sale will be used for general corporate purposes, according to a person familiar with the offering who declined to be identified citing lack of authorization to speak publicly about the deal.
“In a slow growth environment, CAT should continue to prosper as it cuts costs and achieves modest price increases,” Carol Levenson of Chicago-based Gimme Credit LLC wrote today in a note.
Caterpillar last sold more than $1.5 billion of dollar- denominated debt in May 2011, when the Peoria, Illinois-based equipment maker issued $1.25 billion of 3.9 percent, 10-year notes to yield 85 basis points more than similar-maturity Treasuries and $1.25 billion of 5.2 percent bonds due in 2041 with a 98 basis-point spread, according to data compiled by Bloomberg.
Bank of America Corp. and Citigroup Inc. managed the sale, Bloomberg data show.
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