Defence bond and convertible terms.
What defence companies pay to borrow: coupons by tenor and offering route for every bond tranche on the register since 2015, and convertible terms from the pricing releases.
Randeep Bubbra | Lawyer | Making defence financeable
Bonds Convertibles By rating Maturity calendar Market analysis
Bond coupons by tenor and offering route
197 fixed-rate tranches across 99 bond issues since 2015, read from the register. Each cell is the median coupon, with the number of tranches in brackets.
- SEC-registered
- Private (Rule 144A)
- European market
US dollar coupons by tenor and year of issue
| 2015–19 | 2020–21 | 2022–23 | 2024 on | |
|---|---|---|---|---|
| Up to 5 years | 2.55% (19) | 3.1% (6) | 5.1% (7) | 4.83% (12) |
| 6 to 10 years | 3.65% (31) | 3.75% (18) | 5.75% (9) | 5.35% (22) |
| 11 to 20 years | 3.55% (7) | 2.41% (8) | 5.25% (3) | 5.35% (2) |
| Over 20 years | 4.25% (12) | 3.03% (7) | 5.38% (9) | 5.5% (7) |
US dollar coupons by rating at issue and year of issue
| 2015–19 | 2020–21 | 2022–23 | 2024 on | |
|---|---|---|---|---|
| A or higher | 3.06% (18) | 3.05% (10) | 5.03% (12) | 4.8% (9) |
| BBB | 3.55% (39) | 3% (19) | 5.67% (16) | 5.32% (30) |
| BB | 5% (1) | — | — | — |
74 of 99 fixed-rate bond issues have a public rating. Ratings come from the SEC pricing term sheet for the notes, the issuer's own release or, failing both, Fitch's Long-Term Issuer Default Rating on the issue date; where agencies differ, the middle of three or the lower of two. Each bond's page quotes its source.
Coupons by offering route and year of issue
| 2015–19 | 2020–21 | 2022–23 | 2024 on | |
|---|---|---|---|---|
| SEC-registered | 3.35% (57) | 2.98% (30) | 5.38% (27) | 5.2% (34) |
| Private (Rule 144A) | 5.19% (12) | 4% (9) | 6.25% (1) | 5.5% (9) |
| European market | 0.75% (5) | 0.62% (4) | 2.64% (2) | 3.54% (7) |
The offering route groups every issue, rated or not: SEC-registered notes (mostly investment-grade issuers), private Rule 144A offerings (most high-yield issuers, and some foreign or first-time investment-grade issuers) and the European market (euro, sterling and krona bonds). Coupons are in the currency of issue; floating-rate notes are left out.
Convertible terms
7 convertibles on file. Median conversion premium 35% and median coupon 2.25%; 2 came with capped calls, at a median cap of 88% above the share price. Since 2024: 4 deals, median premium 28.8%.
| Priced | Issue | Coupon | Premium | Conversion price | Cap price | Cap above share price | Maturity | Source |
|---|---|---|---|---|---|---|---|---|
| 10 Nov 2025 | BWX Technologies US$1,100m convertible senior notes due 2030 | 0% | 32.5% | US$262.51 | US$396.24 | 100% | 1 Nov 2030 | Pricing release |
| 3 Jul 2025 | AeroVironment US$747.5m 0% convertible senior notes due 2030 | 0% | — | US$322.40 | — | — | 15 Jul 2030 | Pricing release |
| 19 Dec 2024 | BigBear.ai US$182.5m 6.00% convertible senior secured notes due 2029 | 6% | — | — | — | — | 15 Dec 2029 | Pricing release |
| 27 Feb 2024 | Parsons US$700m 2.625% convertible senior notes due 2029 | 2.625% | 25% | US$94.11 | US$131.76 | 75% | 1 Mar 2029 | Pricing release |
| 31 Jan 2023 | Rheinmetall €1bn convertible bonds (2028 and 2030 series) 2030 series | 2.25% | 45% | €309.90 | — | — | 7 Feb 2030 | Register |
| 20 Aug 2020 | Parsons US$350m 0.25% convertible senior notes due 2025 | 0.25% | 35% | US$44.86 | — | — | 2025 | Pricing release |
| 9 Dec 2016 | Aerojet Rocketdyne US$300m 2.25% convertible senior notes due 2023 | 2.25% | 36.8% | US$26.00 | — | — | 15 Dec 2023 | Pricing release |
Terms at pricing, from the issuer's pricing release; conversion and cap prices adjust under the indenture. Cap above share price is worked out from the cap and conversion prices and the stated premium.
The wording behind each figure
BWX Technologies US$1,100m convertible senior notes due 2030
The Notes will not bear regular interest
The Notes will mature on November 1, 2030
Key Elements of the Transaction · $1.1 billion 0% Convertible Senior Notes with an initial conversion price of approximately $262.51
…per share of BWXT's common stock, which represents a premium of approximately 32.5%
The cap price of the capped call transactions will initially be $396.24
…believed to be qualified institutional buyers pursuant to Rule 144A
AeroVironment US$747.5m 0% convertible senior notes due 2030
The Notes will not bear regular interest
The Notes will mature on July 15, 2030
The initial conversion rate is 3.1017 shares of the Company's common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $322.40
BigBear.ai US$182.5m 6.00% convertible senior secured notes due 2029
The New Convertible Notes will be senior, secured obligations of BigBear.ai and will accrue interest at a rate of (i) 6.00% per annum
The New Convertible Notes will mature on December 15, 2029
Parsons US$700m 2.625% convertible senior notes due 2029
The notes will bear interest at a rate of 2.625% per annum
The notes will mature on March 1, 2029
The initial conversion rate for the notes is 10.6256 shares of Parsons’ common stock per $1,000 principal amount of notes (which is equivalent to an initial conversion price of approximately $94.11
…of approximately $94.11 per share, which represents a premium of approximately 25.0%
The cap price of the capped call transactions will initially be $131.7575
The offering is being made to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A
Parsons US$350m 0.25% convertible senior notes due 2025
The notes will bear interest at a rate of 0.25% per annum
The initial conversion rate for the notes is 22.2913 shares of the Company’s common stock per $1,000 principal amount of notes (which is equivalent to an initial conversion price of approximately $44.86
…of approximately $44.86 per share, which represents a premium of approximately 35%
The offering was made to qualified institutional buyers pursuant to Rule 144A
Aerojet Rocketdyne US$300m 2.25% convertible senior notes due 2023
Interest on the notes is payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2017, at a rate equal to 2.25% per annum
The notes will mature on December 15, 2023
…amount of notes, which is equivalent to an initial conversion price of approximately $26.00
The initial conversion price represents a premium of approximately 36.8%
The offering is being made to qualified institutional buyers pursuant to Rule 144A
Built from the register, which is checked against each issuer's own documents. Updated with every register update. Working on a bond or convertible? Book 20 minutes with Randeep to see how your terms compare.