Cummins to call $250 million 9½% notes in 2006

By Jennifer Chiou

New York, Sept. 26 - Cummins Inc. announced plans to redeem $250 million of its 9½% notes in December 2006, the notes' first call date.

The company said it will use cash from its operations for the buyback of the November 2002-issued notes.

Cummins also announced plans to buy back $100 million of its stock within two years.

"Over the past five years, we have worked hard to improve our cost structure, strengthen our balance sheet and restructure our businesses to make Cummins a stronger global competitor," said Tim Solso, chairman and chief executive officer, in a news release.

"Reducing debt is a central part of Cummins' strategy to strengthen its balance sheet and improve its liquidity," chief financial officer Jean Blackwell said in the release.

"We reduced our debt by $258 million early this year, and our continued strong operating performance has put us in the position to take further steps to lower our debt levels."

Based in Columbus, Ind., Cummins, which saw recent ratings upgrades from Standard & Poor's and Moody's Investors Services, designs and distributes engines and related technology.

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