Northrop Grumman Corp. (NOC:US), the maker of Global Hawk surveillance drones, sold $2.85 billion of bonds in its first sale in more than two and a half years.
The company’s $850 million of 1.75 percent, five-year notes yield 80 basis points more than similar-maturity Treasuries, $1.05 billion of 3.25 percent, 10-year debt pay a relative yield of 115 basis points and $950 million of 4.75 percent, 30-year securities pay a 145 basis-point spread, according to data compiled by Bloomberg. The debentures are rated Baa2 by Moody’s Investors Service.
Proceeds may be used to repay debt including funding the make-whole redemption of the company’s $350 million of 3.7 percent notes due August 2014 and its $500 million of 1.85 percent debentures due November 2015, Northrop Grumman said in a statement today. The company said it also may use proceeds for general corporate purposes including share repurchases, pension-plan funding, acquisitions and working capital.
Northrop last sold debt in November 2010, issuing the 2015 notes and $700 million of 3.5 percent securities due in March 2021, Bloomberg data show. The 3.5 percent bonds traded at 107.4 cents on the dollar to yield 2.45 percent on May 22, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
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