Lockheed ready to sell $1.25 billion in bonds 2nd big debt issue spurred by low rates

June 20, 1996|By BLOOMBERG BUSINESS NEWS

NEW YORK -- Lockheed Martin Corp. plans to sell $1.25 billion worth of bonds this week, less than two months after completing the biggest investment-grade corporate debt sale in history, investment bankers said yesterday.

The world's largest defense contractor is taking advantage of low interest rates and buoyant investor demand to sell notes in three parts, according to the bonds' underwriters.

The sale will make the Bethesda-based company the biggest seller of corporate debt in 1996, excluding financial companies, according to Securities Data Co. of Newark, N.J. In May, Lockheed Martin sold $3.5 billion worth of bonds in the biggest corporate bond sale ever by a company with an investment-grade credit rating.

Lockheed Martin, the product of the 1995 merger between Lockheed Corp. and Martin Marietta Corp., is raising funds to finance its $9.1 billion acquisition of most of Loral Corp., another defense contractor. It's doing so at an opportune time.

Many big investors "have insatiable appetites for corporate bonds," said Glenn Migliozzi of Fleet Investment Advisers in Boston. Lockheed Martin "did a major acquisition and needs to come to the bond market a few more times."

Lockheed Martin plans to sell $500 million of two-year securities, $400 million of eight-year debt, and $350 million of 12-year bonds.

The two-year notes are expected to be sold at a price to yield 25 to 30 basis points more than Treasuries, said Leonard Lovito, who manages about $600 million of bonds for J&W Seligman & Co. in New York. The eight-year securities will yield 50 to 53 basis points more than comparable Treasuries while the 12-year securities will yield about 70 basis points more, he said.

Lovito expects investors to snap up the bonds at those yields. "There's an appetite for new issues," he said.

Pub Date: 6/20/96

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