PPG Issues $1 Billion in Debt in Three Parts

摘要

PPG Industries is issuing a total of $1 billion in new debt in three different parts, one $500 million and two $250 million each. The $500 million portion carries an interest rate of 3.6% and will mature in 2020. The two $250 million parts have interest rates and maturation dates of 1.9% and 2016, and 5.5% and 2040, respectively. The proceeds from the debt sale will go towards repaying a $400 million term loan, and to fund asbestos claims and employee pension obligations, the company says. Moody's Investors Service (New York) rated the debt 'Baa1,' while Standard and Poor's (S&P; New York) rated it 'BBB+.' Both ratings are investment-grade and in line with PPG's overall corporate credit rating. "With this financing PPG has funded all of its near-term obligations at attractive rates," says Moody's senior v.p. John Rogers. The 2020 bonds are priced at exactly 100 basis points, or one percentage point, above 10-year U.S. treasury notes as of November 9. The 2016 bonds are about 90 basis points above 5-year treasuries, while the 2040 bonds are about 140 basis points above 30-year treasuries. PPG will likely repay the term loan and pay out the asbestos claims sometime in 2011, according to Moody's. The asbestos claims payments are awaiting final court approval, which is "likely to take place in the next 12 months," Rogers says. The debt offering itself is expected to close Friday, PPG says.