Northrop Grumman Announces $1.5 Billion Debt Redemption

Rhea-AI Summary

Northrop Grumman (NYSE: NOC) will redeem all outstanding 2.55% Senior Notes due October 2022 for cash on March 24, 2021. The redemption will occur at a premium price, leading to an expected pre-tax charge of approximately $55 million in Q1 2021, which is excluded from its 2021 financial guidance. Currently, $1.5 billion of these Notes are outstanding. This action is part of Northrop Grumman's strategy to manage its financial obligations and optimize its capital structure.

Positive

• Redemption of $1.5 billion in Senior Notes will streamline debt structure.
• Management indicates proactive financial strategy with the make-whole premium.

Negative

• The pre-tax charge of $55 million will negatively impact Q1 2021 earnings.

FALLS CHURCH, Va., Feb. 01, 2021 (GLOBE NEWSWIRE) -- Northrop Grumman Corporation (NYSE: NOC) today announced that it will redeem for cash all of its outstanding 2.55% Senior Notes due October 2022 (“Notes”) on March 24, 2021. The Notes will be redeemed at a “make-whole” premium price, calculated in accordance with the Notes and the indenture and supplemental indenture governing the Notes (the “Make-Whole Redemption”). Northrop Grumman currently expects the Make-Whole Redemption to result in a pre-tax charge of approximately $55 million in the first quarter of 2021, which is not contemplated in its 2021 financial guidance of January 28, 2021. As of the date of this press release, $1.5 billion aggregate principal amount of the Notes were outstanding.

Northrop Grumman solves the toughest problems in space, aeronautics, defense and cyberspace to meet the ever evolving needs of our customers worldwide. Our 97,000 employees define possible every day using science, technology and engineering to create and deliver advanced systems, products and services.

Cautionary Statement Regarding Forward-Looking Statements

Statements in this press release contain or may contain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “will,” “expect,” “anticipate,” “intend,” “may,” “could,” “should,” “plan,” “project,” “forecast,” “believe,” “estimate,” “guidance,” “outlook,” “trends,” “goals” and similar expressions generally identify these forward-looking statements. Forward-looking statements are based upon assumptions, expectations, plans and projections that we believe to be reasonable when made, but which may change over time. These statements are not guarantees of future performance and inherently involve a wide range of risks and uncertainties that are difficult to predict. Specific risks that could cause actual results to differ materially from those expressed or implied in these forward-looking statements include, but are not limited to those identified and discussed more fully in the section entitled “Risk Factors” in the Form 10-K for the year ended December 31, 2020 and from time to time in our other filings with the Securities and Exchange Commission. You are urged to consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on the accuracy of forward-looking statements. These forward-looking statements speak only as of the date when made, and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Contact:	Tim Paynter (Media)
	703-280-2720 (office)
	timothy.paynter@ngc.com
	Todd Ernst (Investors)
	703-280-4535 (office)
	todd.ernst@ngc.com

FAQ

What will Northrop Grumman do with its 2.55% Senior Notes due October 2022?

Northrop Grumman will redeem all of its outstanding 2.55% Senior Notes due October 2022 on March 24, 2021.

How much will the redemption of Northrop Grumman's Senior Notes cost?

The redemption is expected to result in a pre-tax charge of approximately $55 million.

What is the current amount of outstanding Senior Notes for Northrop Grumman?

As of the press release, Northrop Grumman has $1.5 billion in outstanding Senior Notes.

Is the pre-tax charge from the redemption included in Northrop Grumman's 2021 financial guidance?

No, the pre-tax charge is not included in Northrop Grumman's 2021 financial guidance.