United Launch Alliance (ULA), the joint venture owned by Boeing Co. and Lockheed Martin Corp., is planning to raise about $500 million through a private bond placement to refinance existing debt, a Bloomberg report said on Wednesday.
The proposed transaction would be structured as a true private placement, meaning the bonds would not be registered for public sale nor offered on public markets. Instead, ULA would sell the securities directly to institutional investors. The arrangement is being put together by US Bancorp, Mizuho Financial Group Inc., and Wells Fargo & Co., according to the report.
ULA provides rocket launch services to U.S. military customers as well as commercial clients, including Amazon.com Inc. The company was formed in 2006 by Boeing and Lockheed Martin and remains one of a limited number of U.S. firms authorized to place sensitive Defense Department satellites into orbit.
Private placements are an alternative to public offerings that can allow borrowers to sidestep some of the volatility associated with public markets. The private placement market has seen heightened activity this year: the market recorded record issuance through May, with a range of borrowers tapping the channel, including the National Football League and Brady Corp., the report noted.
The stated purpose of the planned financing is to refinance existing debt on ULA's balance sheet. The report attributes the plan to Bloomberg; it describes the proposed size of the issuance as roughly $500 million.
Context and mechanics
Under a true private placement, the documentation and sale process differ from registered securities offerings, with sales directed at qualified institutional buyers rather than the general public. The banks named as arrangers in the report are expected to coordinate investor outreach and structure the terms of the notes.
What is known from the report
- ULA intends to raise approximately $500 million in a private bond sale to refinance existing debt.
- The transaction is being arranged by US Bancorp, Mizuho Financial Group Inc., and Wells Fargo & Co.
- The bonds will be sold via a true private placement and will not be registered in public markets.
The Bloomberg report forms the basis for these details; the transaction and its final terms are described in that report and are subject to completion and official announcements by the parties involved.