By Ronda Fears
Nashville, Tenn., Nov. 16 - Northrop Grumman Corp. sold $600 million of three-year mandatory convertible preferreds using the premium exchangeable participating securities, or PEPS, at par of 100 to yield 7.25% with a 22% initial conversion premium. J.P. Morgan and Salomon Smith Barney were bookrunning lead managers of the registered deal, which was upsized from $400 million. The convert priced at the aggressive end of price talk that put the yield between 7.25% and 7.75% yield and the initial conversion premium at 18% to 22%.
The defense giant, which is in the process of acquiring Newport News Shipbuilding, said proceeds were earmarked to repay debt and general corporate purposes. The company also 8 million shares of common stock at $88.50 per share for more than $700 million.
Terms of the new deal are:
Issuer: Northrop Grumman Corp.
Amount: $600 million
Greenshoe: $90 million
Lead Managers: J.P. Morgan and Salomon Smith Barney
Maturity Date: Nov. 16, 2004
Dividend: 7.25%
Issue Price: par, $100
Yield-to-maturity: 7.25%
Conversion Premium: 22%
Conversion Price: $88.50/$107.97
Conversion Ratio: 0.9262/1.1299
Call: non-callable
Expected Rating(s): Moody's: Baa3
| S&P: BBB-
|
| Settlement Date: | Nov. 21
|
|
|
| End
|
© 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.
