Parker-Hannifin issues €700 million in senior notes

Cleveland-based Parker-Hannifin Corporation (NYSE:PH), a prominent player in the machinery industry with a market capitalization of $90.24 billion, has successfully completed the issuance of €700 million in senior notes, as per a recent filing with the Securities and Exchange Commission.

The offering, which was finalized today, involved 2.900% Senior Notes due in 2030. According to InvestingPro data, the company’s stock is trading near its 52-week high, reflecting strong market confidence in its financial management.

The industrial manufacturing company stated that the net proceeds from the note issuance would be used to repay its 1.125% Senior Notes maturing in 2025, in combination with cash on hand.

Until the repayment, funds may be allocated to interest-bearing accounts, short-term securities, or for reducing short-term debt. The company maintains a moderate debt level with a debt-to-equity ratio of 0.69 and a healthy current ratio of 1.06, as revealed by InvestingPro analysis.

Parker-Hannifin highlighted that the notes will pay an annual interest of 2.900%, with the first payment due on March 1, 2026, and continuing annually thereafter. The company reserves the right to redeem the notes before February 1, 2030, at specified redemption prices detailed in the prospectus supplement. Additionally, in certain change of control scenarios, the company is obliged to offer to repurchase the notes at 101% of their principal plus accrued interest.

The notes are unsecured and rank equally with other senior unsecured debts of the company and senior to any subordinated debt. They are effectively subordinated to any secured debt to the extent of the value of the collateral securing that debt.

The company also mentioned that the underwriters of the notes and their affiliates are involved in commercial dealings with Parker-Hannifin, including acting as lenders under the company’s revolving credit facility. Some underwriters may hold the company’s maturing notes and therefore may receive a portion of the proceeds from this new issuance.

This SEC filing also included the legal opinion related to the offering and confirmed that the notes were issued under an Indenture dated September 5, 2023, with The Bank of New York Mellon (NYSE:BK) Trust Company, N.A. serving as the trustee.

The completion of this offering is part of Parker-Hannifin’s broader financial management strategy, as the company continues to navigate the global manufacturing market. The information for this article is based on a press release statement.

In other recent news, Parker-Hannifin Corporation reported its fourth-quarter 2024 earnings with an adjusted earnings per share (EPS) of $6.53, surpassing analyst forecasts of $6.23. Although revenue slightly declined to $4.7 billion, falling short of the expected $4.81 billion, the company’s strong margin performance was notable.

Meanwhile, Citi analysts initiated coverage of Parker-Hannifin with a Buy rating and a price target of $795, citing a positive outlook on the company’s strategic initiatives and growth prospects. Moody’s (NYSE:MCO) Ratings recently upgraded Parker-Hannifin’s senior unsecured ratings to A3 from Baa1, maintaining a positive outlook based on anticipated operating margin expansion and strong credit metrics.

Additionally, Stifel increased its price target for Parker-Hannifin to $691, noting the company’s robust margin performance and improved order volumes. KeyBanc also raised its price target to $790, highlighting positive order trends and the company’s balanced portfolio as factors supporting a gradual industrial recovery.

Parker-Hannifin’s aerospace sector demonstrated significant growth, contributing to the company’s overall performance. These recent developments reflect the company’s resilience and strategic focus on operational efficiency and growth through acquisitions.

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