Northrop Grumman Raises $1 Billion Via Debt

Northrop Grumman Corporation (NYSE:NOC), in an exchange filing, said that on May 29, it had issued $1 billion in new senior notes, split evenly between two tranches maturing in 2030 and 2035.

The notes, carrying interest rates of 4.650% and 5.250% respectively, were issued on May 29 under an amended and restated indenture.

The securities were sold through an underwriting agreement involving Mizuho Securities USA, Goldman Sachs & Co., and Morgan Stanley & Co. as lead managers.

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The company intends to use the net proceeds for various activities, including repayment of existing debt, share repurchases, and working capital.

For debt repayment, the company release specifically mentioned the 7.875% and 7.750% senior notes due in 2026. This suggests a strategy to refinance higher-interest debt with the new, lower-interest notes, potentially reducing future interest expenses.

As of March 31, 2025, the company held long-term debt (net of current portion) of $14.17 billion.

In a separate announcement, the company revealed a $50 million equity investment in Firefly Aerospace, further solidifying its partnership to develop a next-generation medium-lift launch vehicle named Eclipse. This collaborative spacecraft blends the engineering strengths of Northrop Grumman’s Antares and Firefly’s Alpha rockets.

The Eclipse system will offer the capacity to deliver approximately 16 metric tons to low Earth orbit and over three metric tons to geosynchronous transfer orbit.

Its modular design integrates heritage components from the Antares line alongside enhanced avionics, a larger 5.4-meter fairing, and upgraded propulsion systems including Firefly’s Miranda engines.

To date, over 60 hot fire tests have been completed on the Miranda engines, with critical qualification hardware already in fabrication. The vehicle is slated for its first launch as early as 2026 from Wallops Island, Virginia.

Executives from both firms praised the alliance. Jason Kim, CEO of Firefly Aerospace, called the partnership “first-of-its-kind,” emphasizing its potential to transform the launch market.

Wendy Williams, VP and GM of Northrop’s launch systems unit, highlighted Eclipse’s affordability and scalability for civil and security applications.

Price Action: NOC shares are trading lower by 0.40% to $477.45 at last check Friday.

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