UPDATE: Harris Corp. Sells $700 Million Bonds, Increased By $100 Million

Harris Corp. (HRS), a maker of digital radios, sold $700 million of senior unsecured bonds in a two-part offering Tuesday divided into 10- and 30-year debt, according to people familiar with the deal. The deal was increased by $100 million on demand.

Harris priced $400 million of 4.40% 10-year bonds at a discount to yield 4.471%, or 1.65 percentage points over comparable Treasurys, and $300 million of 6.15% 30-year bonds to yield 6.19%, or 2.05 percentage points over Treasurys.

Proceeds from the sale, 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 was expected to be rated Baa1 by Moody's Investors Service and BBB+ by Standard & Poor's, and has 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. When the company's existing 6.375% bonds due June 15, 2019, recently 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.

Amount: $400 million 
Maturity: December 15, 2020 
Coupon: 3.625% 
Price: 99.429 
Yield: 4.471% 
Spread: 165 basis points over Treasurys 
Ratings: Baa1 (Moody's Investors Service) 
         BBB+ (Standard & Poor's) 
 
Amount: $300 million 
Maturity: December 15, 2040 
Coupon: 3.625% 
Price: 99.454 
Yield: 6.19% 
Spread: 205 basis points over Treasurys 
Ratings: Baa1 (Moody's Investors Service) 
         BBB+ (Standard & Poor's)

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

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