Ingersoll Rand offers $1.55 billion of senior notes

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Tuesday, June 18, 2013

SWORDS, Ireland—Ingersoll Rand announced this week that it has completed a $1.55 billion debt offering consisting of three tranches, maturing in 2019, 2023 and 2043.

Proceeds from the sale will fund expenses related to the company’s previously announced spinoff of its commercial and residential security businesses and to redeem the company’s current debt. Ingersoll Rand, based here, announced Monday that the new security company—expected to be spun off later this year—will be called Allegion.

According to a news release on its debt offering, which Ingersoll Rand also announced on Monday, the three tranches are: $350 million aggregate principal amount of 2.875 percent notes due in 2019; $700 million aggregate principal amount of 4.25 percent notes due in 2023; and $500 million aggregate principal amount of 5.75 percent notes due in 2043.

The company says it intends to use the net proceeds from the offering of the notes to fund the redemption of IR Global’s existing $600 million aggregate principal amount of 6 percent senior notes due in 2013; $655 million aggregate principal amount of 9.5 percent senior notes due in 2014; and to pay expenses for Allegion.

The redemption premium expense for the early retirement of these notes will approximate $46 million and will negatively impact third-quarter and full-year earnings per share by approximately $0.15 per share, according to the news release. Additionally, the lower interest costs for the new debt and the early refinancing of the 2013 and 2014 notes will reduce the future annualized total interest expense by approximately $30 million, the release said.