Northrop Grumman To Buy Back $2.12 Billion In Debt

LOS ANGELES (AP) — Defense contractor Northrop Grumman Corp. said Monday that it has launched a tender offer to buy back $2.12 billion in debt, and is selling new debt securities.

The company said the transactions will result in a one-time charge in the fourth quarter, but reduce interest expenses going forward.

The offer to buy back $1.92 billion in debt securities issued by Northrop Grumman Systems Corp. is set to end at 5 p.m. Eastern time on Nov. 8. The offer to buy $200 million in Gulf Opportunity Zone Industrial Development Revenue Bonds issued by Northrop Grumman Shipbuilding Inc. is set to end just before midnight Eastern time on Nov. 30. Both offers may be terminated early or extended.

Separately, Northrop said it will use proceeds from the new debt issue for corporate purposes, including repaying $750 million in outstanding notes which bear in interest rate of 7.125 percent per year and come due on Feb. 15, 2011.

Shares were down 42 cents at $63.09 in after-hours trading Monday after closing the regular session up 29 cents at $63.51.