New Issue: Huntington Ingalls sells $600 million 10-year notes at par to yield 5%

By Paul A. Harris

Portland, Ore., Nov. 2 – Huntington Ingalls Industries, Inc. priced a $600 million issue of 10-year senior notes (Ba2/BB+/BB+) at par to yield 5% on Monday, according to market sources.

The yield printed 12.5 basis points beneath the tight end of yield talk in the 5¼% area, according to a trader, who also said that early guidance had the deal yielding 5¼% to 5½%.

J.P. Morgan Securities LLC, BofA Merrill Lynch, Wells Fargo Securities LLC, Mizuho Securities, Scotia Capital and U.S. Bancorp Investments Inc. were the joint bookrunners.

The Newport News, Va.-based shipbuilder plans to use the proceeds and cash on hand to fund the tender offer for its 7 1/8% notes due 2021 and to redeem the notes that are not tendered. Any remaining proceeds will be used for general corporate purposes.

Issuer:	Huntington Ingalls Industries, Inc.
Amount:	$600 million
Maturity:	Nov. 15, 2025
Securities:	Senior notes
Bookrunners:	J.P. Morgan Securities LLC, BofA Merrill Lynch, Wells Fargo Securities LLC, Mizuho Securities, Scotia Capital, U.S. Bancorp Investments Inc.
Senior co-managers:	Capital One South Coast, MUFG, TD Securities
Co-managers:	BB&T, Loop Capital Markets, PNC Capital Markets
Coupon:	5%
Price:	Par
Yield:	5%
Spread:	283 bps
Call protection:	Make-whole call at Treasuries plus 50 bps until Nov. 15, 2020, then callable at 102.5
Trade date:	Nov. 2
Settlement date:	Nov. 17
Ratings:	Moody's: Ba2
	Standard & Poor's: BB+
	Fitch: BB+
Distribution:	Rule 144A and Regulation S for life
Price talk:	5¼% area
Marketing:	Quick to market

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