Huntington Ingalls Industries, Inc. (HII, Financial) has successfully completed a public offering of $1 billion in senior notes, marking a significant financial maneuver aimed at bolstering the company's capital structure. The offering includes $500 million aggregate principal amount of 5.353% Senior Notes due 2030 and $500 million aggregate principal amount of 5.749% Senior Notes due 2035. This strategic move, executed under an underwriting agreement with major financial institutions including J.P. Morgan Securities LLC and BofA Securities, Inc., reflects the company's proactive approach to managing its long-term financial obligations.
The notes, issued under a registration statement filed with the Securities and Exchange Commission, are fully and unconditionally guaranteed by Huntington Ingalls Industries' domestic subsidiaries. These guarantees ensure that the notes are senior unsecured obligations, providing a robust security framework for investors. Interest on the 2030 Notes will accrue at a rate of 5.353% per annum, while the 2035 Notes will accrue at 5.749% per annum, with payments scheduled semi-annually starting July 15, 2025.
The indenture governing the notes includes provisions that restrict the company's ability to incur additional secured debt and engage in certain sale and leaseback transactions. Additionally, it limits the company's capacity to consolidate, merge, or dispose of substantial assets, thereby safeguarding the interests of noteholders. In the event of a "change in control triggering event," Huntington Ingalls Industries is obligated to offer repurchase of the notes at 101% of the principal amount, plus accrued interest.
This debt issuance is a testament to Huntington Ingalls Industries' commitment to maintaining a strong financial foundation while providing flexibility for future growth and investment opportunities. The company's strategic financial management continues to position it favorably in the competitive defense and shipbuilding industry.
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