Northrop Grumman announces early exchange results, modifies offer

Chicago, Aug. 16 – Northrop Grumman Corp. announced the early participation results in its exchange offers and consent solicitations for six series of notes, according to a press release.

The company also amended the offers to extend the early deadline and to increase the cash payment and has waived a condition.

Exchange offers

As previously reported, the company is offering to exchange notes issued by wholly owned subsidiary Northrop Grumman Systems Corp. for up to $1,171,189,000 of new notes issued by the parent, plus cash.

The company is offering to exchange the following series of notes, for a like amount of new notes with the same coupons and maturity dates plus $5 in cash for noteholders who participate by the early deadline. The cash consideration has been increased from $2.50.

The company has received tenders for the following amounts of notes by the original early deadline:

• $75,981,000, or 28.16%, of the $269.85 million outstanding of 7 7/8% debentures due March 1, 2026 (Cusip: 666807AQ5);

• $47,828,000, or 18.63%, of the $256,689,000 outstanding 7¾% debentures due March 15, 2026 (Cusip: 538021AC0);

• $38,859,000, or 94.31%, of the $41,205,000 outstanding 6.65% debentures due Jan. 15, 2028 (Cusip: 872649AQ1);

• $20,235,000, or 22.5%, of the $89.94 million outstanding 7¾% debentures due June 1, 2029 (Cusip: 872649BH0);

• $166,409,000, or 35.67%, of the $466.49 million outstanding 7¾% debentures due Feb. 15, 2031 (Cusip: 666807AW2); and

• $12.3 million, or 26.16%, of the $47,015,000 outstanding 6.98% debentures due March 15, 2036 (Cusip: 538021AH9).

Noteholders who tender after the extended early deadline will only receive $970 principal amount of new notes plus the $5 cash payment.

The rationale for the offer is that the subsidiary currently has around $1.2 billion of notes outstanding and the parent currently has around $11.7 billion of notes outstanding. The exchange is aimed at streamlining the parent’s capital structure. The exchange offers would reduce the structural subordination of the parent’s outstanding notes, which may enhance the credit profile of the notes.

Consent solicitation

Concurrently, the issuers are soliciting consents to adopt certain proposed amendments to each of the indentures governing the existing notes to eliminate certain of the covenants, restrictive provisions and events of default from the indentures. Additionally, the solicitation aims to adopt certain amendments to each of the existing guarantee agreements, dropping Northrup Grumman’s guarantee of the applicable series. In terms of the consent solicitations, the 7¾% notes due 2031 are not part of the solicitation regarding the guarantees.

Details

Each exchange offer was conditioned upon a successful corresponding consent solicitation. This condition has been waived, as of the original early deadline.

The early tender date is now 5 p.m. ET on Aug. 20, pushed back from 5 p.m. ET on Aug. 13.

The withdrawal deadline has also been extended, now 5 p.m. ET on Aug. 17. Earlier, it was 5 p.m. ET on Aug. 13.

The final deadline is 11:59 p.m. ET on Aug. 31.

D.F. King & Co., Inc is the information and tender agent for the offer (877 783-5524, 212 269-5550, noc@dfking.com).

The global security company is based in Falls Church, Va.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.