Howmet Aerospace has announced the pricing of a significant debt offering to help finance its planned acquisition of Consolidated Aerospace Manufacturing, LLC (CAM). The company is raising $1.2 billion through three tranches of senior notes with staggered maturities and varying interest rates. This financing move is part of Howmet’s broader strategy to support its growth through acquisitions, specifically the approximately $1.8 billion purchase of CAM.
The offering is expected to close on March 3, 2026, subject to customary conditions. Alongside the new debt, Howmet plans to use $600 million in borrowings from its commercial paper program or other debt facilities, plus available cash, to fund the acquisition.
Key details:
-
Howmet Aerospace is issuing three series of senior notes totaling $1.2 billion:
- $400 million of 3.750% notes due in 2028
- $300 million of 3.900% notes due in 2029
- $500 million of 4.750% notes due in 2036
-
The notes will be offered publicly through an underwritten offering managed by Citigroup, Goldman Sachs, J.P. Morgan, and SMBC Nikko Securities.
-
The offering proceeds, combined with $600 million of additional borrowings and cash on hand, will be used to finance the $1.8 billion acquisition of Consolidated Aerospace Manufacturing, LLC.
-
The acquisition of CAM is expected to expand Howmet’s footprint in aerospace manufacturing, complementing its existing portfolio of jet engine components, aerospace fastening systems, and airframe structural components.
-
The debt issuance is structured with staggered maturities, allowing Howmet to manage refinancing risk over the medium and longer term.
-
Interest rates on the notes reflect current market conditions and the company’s credit profile, with higher coupons on the longer-dated 2036 notes.
-
The offering is subject to customary closing conditions and is expected to close on March 3, 2026.
Implications for investors:
-
The new debt issuance will increase Howmet Aerospace’s leverage in the near term as it funds the CAM acquisition, which could impact credit metrics and interest expense.
-
The staggered maturities provide a balanced debt maturity profile, reducing the risk of large refinancing needs in any single year.
-
The acquisition of CAM is a strategic move to broaden Howmet’s aerospace manufacturing capabilities, potentially enhancing its competitive position and revenue base.
-
Investors should note the company’s use of a mix of debt and cash to finance the acquisition, indicating a balanced approach to capital structure management.
-
The pricing of the notes suggests investor appetite for Howmet’s credit at current yields, reflecting confidence in the company’s business outlook and acquisition strategy.