HG bonds: Aptiv prices $1.5B of long bonds to take out forward maturities; terms

Aptiv PLC today completed a $1.5 billion offering of 3.10% 30-year senior bonds at T+140, or 20 basis points through early whispers.

The vehicle components concern today announced its intention to use a portion of the net proceeds of the new bond offering to redeem its subsidiary Aptiv Corp.'s $700 million issue of 4.15% senior notes due March 15, 2024, and $650 million issue of 4.25% senior notes due Jan. 15, 2026. It expects to use any remaining net proceeds for general corporate purposes.

The company's BBB/Baa2/BBB ratings profile reflects stable outlooks on all sides.

S&P Global Ratings today said, in its view, "this debt issuance — after related premiums, fees, and expenses — will only slightly increase Aptiv's leverage." The agency added that it continues to expect that the company's leverage will over the next couple of years remain in the 1.5x-2.0x range and its free operating cash flow to debt will stay in the 25%-30% range.

Fitch today said Aptiv's ratings "reflect the company's solid credit profile as it leverages its strong market position in advanced automotive technologies and its low cost base to drive EBITDA and FCF [free cash flow] margins that are among the strongest in the U.S. auto supply industry."

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