Northrop Grumman provides results for exchange offers, solicitation

Chicago, Sept. 1 – Northrop Grumman Corp. provided the final results of its exchange offers and consent solicitations, according to a press release.

The offer expired at 11:59 p.m. ET on Aug. 31.

Exchange offers

As previously reported, the company was 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 was 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 received tenders for the following amounts of notes by the final 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);

• $166,872,000, increased from $166,617,000 at the early deadline, or 35.77%, 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 tendered after the extended early deadline will only receive $970 principal amount of new notes plus the $5 cash payment.

At the final expiration time, all amounts tendered were the same except the 7¾% notes due 2031.

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 will reduce the structural subordination of the parent’s outstanding notes, which may enhance the credit profile of the notes.

Consent solicitation

As previously reported, Northrop Grumman and NGSC 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.

Supplemental indentures and the amendment were executed on Aug. 25.

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

The issuers were 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 aimed 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 was also extended to 5 p.m. ET on Aug. 17. Earlier, it was 5 p.m. ET on Aug. 13.

The company expects the settlement of the exchange offers to occur Sept. 2.

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.