Textron Sells $350 Million Of 5.500% Notes Due 2032, Priced To Yield 5.545%
The proceeds are slated to repay $350 million of 3.65% notes due 2027, S&P Global Ratings said, and the new debt carries a BBB rating.
Textron, the maker of Cessna jets, Bell helicopters and golf cars, issued and sold $350 million of 5.500% notes due March 15, 2032 on Wednesday, according to an 8-K. The notes priced to yield 5.545%, 85 basis points (0.85 percentage points) above the benchmark Treasury.
Pricing and terms
The notes were offered to the public at 99.801% of face value, per the pricing term sheet. The benchmark was the 4.750% Treasury due October 31, 2031, which yielded 4.695%.
Interest is paid each March 15 and September 15, starting March 15, 2027. Textron can redeem the notes early at a make-whole price of Treasury plus 15 basis points before February 15, 2032, or at face value on or after that date.
The underwriters agreed to buy the notes at 99.201% of principal. BofA Securities and Citigroup Global Markets led the group and each took $88,000,000. MUFG Securities Americas took $37,600,000, while SMBC Nikko Securities America, U.S. Bancorp Investments and Wells Fargo Securities each took $32,800,000. PNC Capital Markets took $18,800,000, and BNY Mellon Capital Markets and Loop Capital Markets each took $9,600,000.
Refinancing the 2027 notes
S&P Global Ratings assigned its BBB rating to the proposed notes on Nov. 2, matching Textron's existing senior unsecured debt. S&P said Textron plans to use the proceeds to repay $350 million of 3.65% notes due in 2027, leaving leverage unchanged.
S&P also noted that Textron plans to divest its Industrial segment, which would make it a pure-play aerospace and defense company. That segment makes Kautex automotive fuel systems, golf cars, utility vehicles and turf equipment.
The business behind the debt
Textron reported total revenues of $14.8 billion for 2025, and U.S. government contracts generated about 27% of them. Beyond Textron Aviation and Bell, the company runs Textron Systems, which makes unmanned aircraft, armored vehicles and Lycoming piston engines, and a finance arm that lends mainly to buyers of its aircraft and helicopters.
Textron shares traded at $86.61 in Wednesday trading, down 1.30% from the prior close of $87.75.
The 2032 notes pay a 5.500% coupon, against 3.65% on the 2027 notes they are meant to replace.
Sources
- 8-K Filing — TEXTRON INC (TXT) — SEC EDGAR
- Exhibit tm2628414d4_ex1-1.htm — TEXTRON INC 8-K exhibit — SEC EDGAR
- Textron Inc.'s Proposed Senior Unsecured Notes Ra | S&P Global Ratings — spglobal.com
- Textron: Q3 Earnings Snapshot — Associated Press
