Item 1.01 Entry into a Material Definitive Agreement.
Exchange Offers
On September 2, 2021 (the "Settlement Date"), Northrop Grumman Corporation (the
"Company") completed its previously announced offers to exchange (the "Exchange
Offers") any and all outstanding (i) 7.875% Debentures due 2026 (the "Existing
7.875% 2026 Notes"), (ii) 7.750% Debentures due 2026 (the "Existing 7.750% 2026
Notes"), (iii) 6.650% Debentures due 2028 (the "Existing 6.650% 2028 Notes"),
(iv) 7.750% Debentures due 2029 (the "Existing 7.750% 2029 Notes"), (v) 7.750%
Debentures due 2031 (the "Existing 7.750% 2031 Notes") and (vi) 6.980%
Debentures due 2036 (the "Existing 6.980% 2036 Notes" and, together with the
Existing 7.875% 2026 Notes, the Existing 7.750% 2026 Notes, the Existing 6.650%
2028 Notes, the Existing 7.750% 2029 Notes and the Existing 7.750% 2031 Notes,
the "Existing Notes") of the Company's direct, wholly-owned subsidiary, Northrop
Grumman Systems Corporation, a Delaware corporation ("NGSC"), for (1) new notes
(as described below) issued by the Company and (2) cash. Pursuant to the
Exchange Offers, the following aggregate principal amounts of Existing Notes
were tendered and accepted and will be subsequently canceled:
(i) $76,490,000 in aggregate principal amount of Existing 7.875% 2026 Notes;
(ii) $47,828,000 in aggregate principal amount of Existing 7.750% 2026 Notes;
(iii) $38,859,000 in aggregate principal amount of Existing 6.650% 2028 Notes;
(iv) $79,323,000 in aggregate principal amount of Existing 7.750% 2029 Notes;
(v) $166,872,000 in aggregate principal amount of Existing 7.750% 2031 Notes;
and
(vi) $12,300,000 in aggregate principal amount of Existing 6.980% 2036 Notes.
Following such cancellation, NGSC will have outstanding (i) $193,360,000
aggregate principal amount of Existing 7.875% 2026 Notes, (ii) $208,861,000
aggregate principal amount of Existing 7.750% 2026 Notes, (iii) $2,346,000
aggregate principal amount of Existing 6.650% 2028 Notes, (iv) $10,617,000
aggregate principal amount of Existing 7.750% 2029 Notes, (v) $299,618,000
aggregate principal amount of Existing 7.750% 2031 Notes and (vi) $34,715,000
aggregate principal amount of Existing 6.980% 2036 Notes.
Pursuant to the Exchange Offers, in addition to issuing the new notes described
below, the Company paid aggregate cash consideration of $2,108,710 (representing
the aggregate $2,108,360 in cash consideration and $350 in cash in lieu of any
fractional portion of New Notes) to holders of Existing Notes who validly
tendered and did not validly withdraw their Existing Notes in the Exchange
Offers.
New Northrop Grumman Corporation Notes
Pursuant to the Exchange Offers, the Company issued (i) $76,490,000 in aggregate
principal amount of 7.875% Senior Notes due 2026 (the "7.875% 2026 Notes"), (ii)
$47,828,000 in aggregate principal amount of 7.750% Senior Notes due 2026
(the "7.750% 2026 Notes"), (iii) $38,859,000 in aggregate principal amount of
6.650% Senior Notes due 2028 (the "2028 Notes"), (iv) $79,323,000 in aggregate
principal amount of 7.750% Senior Notes due 2029 (the "2029 Notes"), (v)
$166,864,000 in aggregate principal amount of 7.750% Senior Notes due 2031 (the
"2031 Notes") and (vi) $12,300,000 in aggregate principal amount of 6.980%
Senior Notes due 2036 (the "2036 Notes" and, together with the 7.875% 2026
Notes, the 7.750% 2026 Notes, the 2028 Notes, the 2029 Notes and the 2031 Notes,
the "New Notes").
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The New Notes were issued pursuant to an indenture (the "Original Indenture"),
dated as of November 21, 2001, as supplemented by the first supplemental
indenture, dated as of July 30, 2009 (the "First Supplemental Indenture"), the
third supplemental indenture, dated as of March 30, 2011 (the "Third
Supplemental Indenture"), the fourth supplemental indenture, dated as of
March 30, 2011 (the "Fourth Supplemental Indenture") and the tenth supplemental
indenture, dated as of September 2, 2021 (the "Tenth Supplemental Indenture")
between the Company and The Bank of New York Mellon (the "Trustee") (the
Original Indenture as supplemented by the First Supplemental Indenture, the
Third Supplemental Indenture, the Fourth Supplemental Indenture and the Tenth
Supplemental Indenture, the "Indenture").
The 7.875% 2026 Notes are set to mature on March 1, 2026, the 7.750% 2026 Notes
are set to mature on March 15, 2026, the 2028 Notes are set to mature on
January 15, 2028, the 2029 Notes are set to mature on June 1, 2029, the 2031
Notes are set to mature on February 15, 2031 and the 2036 Notes are set to
mature on March 15, 2036, unless redeemed earlier as applicable. With the
exception of the 7.875% 2026 Notes, the Company may redeem New Notes of any
series at its option, as a whole or in part, at any time or from time to time,
at the applicable redemption price, as described in the applicable form of New
Note.
The Indenture governing the New Notes contains certain covenants, including
covenants related to our ability to create liens, engage in certain sale and
leaseback transactions and engage in certain transactions and asset sales. These
covenants are subject to exceptions and qualifications.
The New Notes have not been registered under the Securities Act of 1933, as
amended, or the securities laws of any state and may not be offered or sold in
the United States or to any U.S. persons except pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the
Securities Act and applicable state securities laws.
The above description of the New Notes does not purport to be complete and is
qualified in its entirety by reference to the Original Indenture, filed as an
exhibit to the Company's current report on Form 8-K filed on November 21, 2001,
the First Supplemental Indenture, filed as an exhibit to the Company's current
report on Form 8-K filed on July 30, 2009, the Third Supplemental Indenture,
filed as an exhibit to the Company's quarterly report on Form 10-Q for the
quarter ended March 31, 2011, filed on April 27, 2011, the Fourth Supplemental
Indenture, filed as an exhibit to the Company's quarterly report on Form 10-Q
for the quarter ended March 31, 2011, filed on April 27, 2011, the Tenth
Supplemental Indenture attached hereto as Exhibit 4.1, and the Forms of 7.875%
2026 Notes, 7.750% 2026 Notes, 2028 Notes, 2029 Notes, 2031 Notes and 2036 Notes
attached hereto as Exhibits 4.2, 4.3, 4.4, 4.5, 4.6 and 4.7, respectively, each
of which is incorporated herein by reference.
Registration Rights Agreement
In connection with the issuance of the New Notes, the Company also entered into
a registration rights agreement, dated as of the Settlement Date (the
"Registration Rights Agreement"), by and between the Company, as issuer, and the
dealer managers named therein, which will give holders of the New Notes certain
exchange and registration rights with respect to the New Notes. If the Company
fails to satisfy its obligations under the Registration Rights Agreement, it may
be required to pay additional interest on the New Notes in certain
circumstances. A copy of the Registration Rights Agreement is filed as Exhibit
4.8 hereto and is incorporated herein by reference in its entirety.
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Consent Solicitations
In connection with the Exchange Offers, the Company solicited the consents (the
"Consent Solicitations") of the holders of the Existing Notes to amend the
indentures governing such Existing Notes to remove certain restrictive and
reporting covenants, as well as to terminate the guarantee of the Existing Notes
by the Company. As previously announced, the Company received the requisite
consents in the Consent Solicitations sufficient to adopt the proposed
amendments and the guarantee termination in respect of the Existing 6.650% 2028
Notes and the Existing 7.750% 2029 Notes (but not with respect to any other
Existing Notes), which amendments were effected pursuant to supplemental
indentures and an amendment to guarantee entered into on August 25, 2021. As a
result of the completion of the Exchange Offers, the amendments with respect to
the Existing 6.650% 2028 Notes and the Existing 7.750% 2029 Notes became
operative and the guarantee of such notes by the Company was terminated. The
Existing Notes are the senior unsecured obligations of NGSC and the Existing
7.875% 2026 Notes, the Existing 7.750% 2026 Notes, the Existing 7.750% 2031
Notes and the Existing 6.980% 2036 Notes remain guaranteed by the Company.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
The information in Item 1.01 is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
4.1 Tenth Supplemental Indenture, dated as of September 2,
2021, between Northrop Grumman Corporation and The Bank of
New York Mellon, as successor to JPMorgan Chase Bank, Trustee, to
Indenture dated as of November 21, 2001
4.2 Form of 7.875% Senior Note due 2026 (included in Exhibit 4.1)
4.3 Form of 7.750% Senior Note due 2026 (included in Exhibit 4.1)
4.4 Form of 6.650% Senior Note due 2028 (included in Exhibit 4.1)
4.5 Form of 7.750% Senior Note due 2029 (included in Exhibit 4.1)
4.6 Form of 7.750% Senior Note due 2031 (included in Exhibit 4.1)
4.7 Form of 6.980% Senior Note due 2036 (included in Exhibit 4.1)
4.8 Registration Rights Agreement, dated as of September 2, 2021,
between Northrop Grumman Corporation and BofA Securities, Inc.,
BNP Paribas Securities Corp. and Wells Fargo Securities, LLC, as
dealer managers
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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