Caterpillar Inc. (CAT) offered €600 million worth of bonds through its financial wing at a coupon rate of 2.75%, which are priced at €99.935. The settlement date for the offer is June 6, 2011, while the date of maturity is June 6, 2014.

The spread of the issue is 100.5 basis points more than the German government notes. The book-running lead managers for the issue are Royal Bank of Scotland Group plc (RBS) and Societe Generale Group.

Ever since the beginning of fiscal 2011, Caterpillar has issued notes totaling $1,750 million comprising four notes of $250 million, $300 million and $450 million in one lot and $750 million in a single tranch. This is the first time in fiscal 2011 when the company is issuing notes in Euro.

Caterpillar has a long history of not only issuing notes but also returning value to shareholders. During the first quarter of fiscal 2011, the company bought back shares for $17.815 million and $8.624 million.

During March, Caterpillar redeemed a total debt of $15.15 million, comprising six notes. Caterpillar’s reward to shareholders is driven by its huge cash balance and strong cash flow. The company’s cash and cash equivalents amounted to $4.87 billion as of March 31, 2011, and cash from operating activities stood at $765 million in the first quarter of the current fiscal year.

Peoria, Illinois-based Caterpillar Inc. is the manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines.

The company is one of the few leading U.S. companies in an industry that competes globally from a principally domestic manufacturing base. The company operates three divisions – Machines, Engines and Financial Products. Caterpillar competes with CNH Global NV (CNH), Komatsu Ltd. and Volvo AB.

 
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