By Mary-Katherine Stinson
Lexington, Ky., Aug. 17 – Eaton Corp. sold two series of notes totaling $2 billion (Baa1/A-/BBB+), one part sustainable, according to an FWP filed with the Securities and Exchange Commission.
Eaton priced $1.3 billion of 4.15% sustainability-linked notes due 2033 and $700 million 4.7% notes due 2052.
The sustainability linked notes priced at 99.929 to yield 4.158% at a spread of 135 basis points over Treasuries.
The 2052 notes priced at 99.458 to yield 4.734% at a spread of 162.5 bps over Treasuries.
The sustainability-linked notes will be subject to an interest step-up of an additional 25 bps beginning Sept. 15, 2028 unless the sustainability performance target has been satisfied for the previous year and the related assurance letter from the external verifier verifying the amount of Scope 1 and Scope 2 emissions for 2027 has been received.
The sustainable notes feature a make-whole call at Treasuries plus 25 bps until three months prior to maturity on or after Dec. 15,2032 at which point they are callable at par. The 2052 notes are callable at any time prior to Feb. 23, 2052, six months prior to maturity, at Treasuries plus 25 bps. Following that, they are callable at par.
Proceeds will be used to redeem the company’s outstanding 2.75% senior notes due 2022 and 3.68% senior notes due 2023 along with general corporate purposes.
The notes are guaranteed by Eaton Corp. plc.
Eaton is a Cleveland-based intelligent power management company.
| Issuer: | Eaton Corp.
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| Guarantor: | Eaton Corp. plc
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| Amount: | $2 billion
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| Bookrunners: | BofA Securities, Inc., Deutsche Bank Securities Inc., Loop Capital Markets LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC
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| Senior co-managers: | Barclays Capital Inc., BNP Paribas Securities Corp. and Goldman Sachs & Co. LLC
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| Co-managers: | BNY Mellon Capital Markets, LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, KeyBanc Capital Markets Inc. and PNC Capital Markets LLC
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| D&I co-managers: | Academy Securities, Inc., AmeriVet Securities, Inc. and CastleOak Securities, L.P.
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| Trustee: | Bank of New York Mellon Trust Co., NA
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| Counsel to issuer: | White & Case LLP, McCann FitzGerald (Irish law), White & Case (Luxembourg) Sarl (Luxembourg law) and De Brauw Blackstone Westbroek NV (Dutch law)
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| Counsel to bookrunners: | Shearman & Sterling LLP
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| Change of control: | At 101
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| Trade date: | Aug. 16
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| Settlement date: | Aug. 23
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| Ratings: | Moody’s: Baa1
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| S&P: A-
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| Fitch: BBB+
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| Sustainable notes
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| Amount: | $1.3 billion
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| Maturity: | March 15, 2033
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| Coupon: | 4.15% initially; subject to an interest rate step up of 25 bps beginning Sept. 15, 2028 if sustainability performance targets are not met
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| Price: | 99.929
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| Yield: | 4.158%
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| Spread: | Treasuries plus 135 bps
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| Call features: | Make-whole call at Treasuries plus 25 bps until three months prior to maturity; on or after Dec. 15,2032 at par
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| Cusip: | 278062AH7
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| 2052 notes
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| Amount: | $700 million
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| Maturity: | Aug. 23, 2052
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| Coupon: | 4.7%
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| Price: | 99.458
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| Yield: | 4.734%
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| Spread: | Treasuries plus 162.5 bps
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| Call features: | Any time prior to Feb. 23, 2052 at Treasuries plus 25 bps.; after at par
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| Cusip: | 278062AJ3
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