Harley refinances debt; Master Lock owner to spin off companies; Summerfest to issue $25 million bonds to finance improvements
Harley refinances debt
Harley-Davidson Inc. has repurchased $297 million of senior unsecured notes scheduled to mature Feb. 1, 2014.
The Milwaukee company repurchased the notes, held by Davis Selected Advisers L.P., at a price of $380.8 million.
The transaction was priced based on U.S. Treasury rates and market credit spreads. If held to maturity, Harley-Davidson would have incurred total principal and interest payments of approximately $438 million on the notes between now and maturity. The company used cash on hand for the repurchase. The repurchased notes will be cancelled by the company.
In February 2009, during the depths of the economic recession and with the credit markets largely frozen, Harley-Davidson placed $300 million of senior unsecured notes each with Davis Selected Advisers and Berkshire Hathaway Inc.
Harley-Davidson expects the repurchase to reduce fourth-quarter 2010 earnings by approximately $82.7 million on a pre-tax basis. The company will not incur interest expense on the repurchased notes of approximately $45 million per year in 2011 through 2013 and $3.7 million in 2014.
Master Lock owner to spin off companies
Deerfield, Ill.-based- Fortune Brands Inc., the owner of Oak Creek-based Master Lock, today announced that it plans to separate its three main consumer businesses.
The company plans to continue Fortune Brands as an independent, publicly-traded company focused solely on its distilled spirits business. It plans to spin off the home and security business, which includes Master Lock. The company also plans to sell or spin-off its golf business.
Fortune Brands plans to complete the separation within the next few months.
"We are taking the next logical step in the evolution of Fortune Brands, which we believe will maximize long-term value for our shareholders and create exciting opportunities within our businesses," said Bruce Carbonari, chairman and chief executive officer of Fortune Brands.
Master Lock will be part of Fortune Brands Home & Security LLC, which has annual sales exceeding $3 billion. Its largest single brand is Moen faucets.
Summerfest to issue $25 million bonds to finance improvements
Milwaukee World Festival Inc. has announced a $25 million revenue bond offering to help finance a two-year, two-phased renovation project slated for 22-acres at the south end of Henry Maier Festival Park.
“We are thrilled to be moving forward with this renovation project. It underscores our commitment to quality, our community and the future of Summerfest. As the largest renovation project in the forty-three year history of Summerfest, this initiative will create a world-class festival site and experience for people to enjoy for decades to come,” stated Don Smiley, president and chief executive officer of Milwaukee World Festival Inc.
The first phase of the construction plan calls for: a new Briggs & Stratton Big Backyard area with a capacity of approximately 7,000 attendees; a new two-story structure, featuring a variety of food and beverage options at ground level with a tiered and covered viewing deck on the second floor; a new South Gate and Box Office, walkways, merchandise areas, restrooms, beverage stands and other features on the south end of Henry Maier Festival Park, all to be completed by the 2011 festival season.
The second phase will commence after the 2011 season and include another major stage area, new food and beverage offerings, restrooms and amenities that celebrate and incorporate the waterfront. The second phase of the plan is slated to be completed by the 2012 festival season, in time for the 45th anniversary of Summerfest.
The new Summerfest bonds will be issued through the Redevelopment Authority of the City of Milwaukee and will have a maturity of 20 years. The bonds will be rated and sold in increments of $5,000. The bonds will maximize after-tax income for Wisconsin residents who invest since the interest earned is exempt from both state and federal taxes. Community residents and other interested investors will have the opportunity to purchase state and federal tax-exempt bonds starting the week of Dec. 13.
Investors interested in purchasing the bonds should contact their financial advisor. Robert W. Baird & Co. Inc. is serving as underwriter of the offering.