Following a successful investor roadshow, BAE Systems plc launched a bond deal into the US market to take out a $4bn bridge facility for its acquisition of Ball Aerospace and to refinance an $800m October 2024 bond maturity. BAE Systems priced a total of $4.8bn across multiple-year tranches in a transaction of critical strategic importance for the company.
The $4.8bn issuance marked the final stage in BAE System’s acquisition of Ball Aerospace (a leading provider of spacecraft, mission payloads, optical systems and antenna systems). The net proceeds, alongside general corporate purposes, were used to repay a $4bn acquisition facility, which was fully drawn in February 2024. The Ball Aerospace acquisition was a strategic milestone for BAE Systems – as it provided an opportunity to add a high quality, fast-growing technology business with significant capabilities to its core business, through a new business segment called Space & Mission Systems.
Despite a busy market, the deal received an excellent reception with the orderbook peaking at $32.9bn, making it the third largest USD orderbook ever for a UK corporate. The complex M&A-related deal required a considered FX and rates risk management strategy as well as a detailed intercompany structuring plan.
The project involved collaboration among a wide range of stakeholders both within the company and beyond. Group treasury coordinated inputs from head office functions including group legal, group tax, company secretariat and group finance. Treasury also coordinated input from key third parties including the banks, ratings agencies, the company’s auditors and US and UK legal counsels. It was also critical to maintain close dialogue with their US colleagues throughout as they managed the process to close the Ball Aerospace acquisition.
It was a large, multifaceted deal, with five tranches and complex risk management and intercompany structuring, executed alongside an M&A transaction, requiring great co-ordination. It was a best-in-class execution
