High-grade: Cummins eyes debt for $3.7B acquisition of Meritor

Cummins Inc., which is rated A+/A2, disclosed that it intends to finance its planned $3.7 billion acquisition of Meritor using a combination of cash on the company's balance sheet and debt. The acquisition is expected to close by the end of the year.

In August 2021, Cummins entered into an amended and restated $2 billion unsecured revolver due August 2026. In August 2020, Cummins completed a $2 billion, three-part bond offering for general corporate purposes.

In November 2020, Meritor completed a $275 million offering of 4.5% senior unsecured notes due December 2028 to redeem existing bonds.

Meritor makes automotive components for original equipment manufacturers and the aftermarket. Corporate issuer ratings are BB/Ba3/BB-.

Cummins designs, manufactures, distributes and services diesel and natural gas engines and products worldwide.