Northrop Grumman gives early exchange results from extended deadline

Chicago, Aug. 23 – 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.

Previously, the company had amended the offers to extend the early deadline, increased the cash payment, and had 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 participated by the early deadline. The cash consideration was increased from $2.50.

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

• $76.49 million, or 28.35%, 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);

• $79,323,000, or 88.2%, of the $89.94 million outstanding 7¾% debentures due June 1, 2029 (Cusip: 872649BH0);

• $166,617,000, or 35.72%, 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

Northrop Grumman and NGSC have received the requisite consents for the proposed amendments to the indentures related to the 6.65% debentures due 2028 and the 7¾% debentures due 2029. These amendments will become operative only upon the settlement of the applicable exchange offer.

In terms of the consent solicitations, the 7¾% notes due 2031 are not part of the solicitation regarding the guarantees.

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.

Details

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

The early tender date was originally 5 p.m. ET on Aug. 13 and was then extended to 5 p.m. ET on Aug. 20.

The withdrawal deadline had also been extended to 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.

The company expects the settlement of the exchange offers to occur Sept. 2, unless the expiration date is extended.

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.

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