Harris Corp. To Sell $600 Million Bonds

Harris Corp. (HRS), a maker of digital radios, is in the market to sell $600 million of senior unsecured bonds in a two-part offering, split into 10- and 30-year debt, according to people familiar with the deal.

The tranches are expected to be roughly equal, these people add, noting the deal should price today.

Proceeds from the sale, being managed by Bank of America Merrill Lynch, J.P.Morgan Chase & Co. and Morgan Stanley, are expected to be used to help repay some of the debt the company took on when it acquired satellite-communications provider CapRock Communications for about $525 million in July.

The new debt is expected to be rated Baa1 by Moody's Investors Service and BBB+ by Standard & Poor's, and it will have a put option allowing holders of the debt to sell the bonds back to the issuer at 101% of its face value.

Harris is a relatively infrequent issuer, according to one underwriter on the sale, so that could make it attractive to buyers looking for more exposure to the company. When the company's existing 6.375% bonds due June 15, 2019, traded hands in the secondary market, they had a risk premium of 152 basis points over comparable Treasury securities for a yield of 4.412%, according to online trading platform MarketAxess.

The company also has debt outstanding maturing in October 2015, which recently traded hands around 168 basis points over Treasurys in the secondary market, according to MarketAxess prices.

-By Katy Burne, Dow Jones Newswires; 212-416-3084; katy.burne@dowjones.com.

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