Caterpillar Inc. (CAT) through its financial wing Caterpillar Financial Services Corp. has issued a note amounting to $750 million having a coupon rate of 1.375% at a price of $99.947. This is a three-year note maturing on May 20, 2014.
The date of settlement is May 20, 2011. The notes are non-callable on early redemption having a spread of 47 basis points more than the government bonds.
Caterpillar earlier issued $1 billion notes in three parts comprising $250 million, $300 million and $450 million. The second and third tranches had a spread of 53 basis points and 65 basis points, respectively, on the issue.
Caterpillar has a long history of returning value to shareholders. During the first quarter of fiscal 2011, the company bought back shares for $17.815 million and $8.624 million, maturing on February 15, 2016 and March 15, 2016, respectively.
During March, Caterpillar redeemed a total debt of $15.15 million, comprising six notes. Caterpillar's reward to shareholders is driven by its huge cash balance and strong cash flow. The company possessed cash and cash equivalents of $4.87 billion as of March 31, 2011, and cash from operating activities of $765 million in the fiscal first quarter.
Peoria, Illinois-based Caterpillar Inc. is the manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines.
The company is one of the few leading U.S. companies in an industry that competes globally from a principally domestic manufacturing base. The company operates three divisions – Machines, Engines and Financial Products. Caterpillar competes with the likes of CNH Global NV (CNH), Komatsu Ltd. and Volvo AB.
CATERPILLAR INC (CAT): Free Stock Analysis Report
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