Textron Inc. announced that it sold $250 million in seven-year notes with a 4.5 percent coupon. The company expects to use all of the net proceeds from the sale of the notes for general corporate purposes, including the repayment of a portion of its commercial paper under existing programs.
On July 17, 2003, Textron redeemed its 7.92 percent junior subordinated deferrable interest debentures due 2045, funding the redemption with commercial paper. The debentures were held by Textron’s wholly owned trust, and the proceeds from their redemption were used to redeem all of the $500 million Textron Capital I trust preferred securities with a 7.92 percent dividend yield.
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By refinancing the debentures at current interest rates, Textron expects to reduce its annualized after-tax financing costs by approximately $15 million, or about $0.10 per share.
