Caterpillar (CAT) has redeemed notes issued earlier by Caterpillar Financial Services, for a total amount of $9.71 million. The company decided to redeem 100% of the remaining amount by exercising the call option. The three notes that the company redeemed have coupon rates of 5.7%, 5.75% and 5.65%, with redemption prices of $5.021 million, $2.391 million and $2.295 million, respectively. All the three notes are maturing on March 15, 2027.

At the same time the company also decided to redeem another three notes issued by its financial wing, for a total amount of $5.44 million. The three notes include one with a coupon rate of 5.4% to be redeemed at a price of $679,000 and another with a coupon of 5.25% to be redeemed at a price of $1.573 million. These notes are maturing on April 15, 2023. The third note maturing on April 15, 2027 with the coupon rate of 5.6% would be redeemed for $3.188 million.

Caterpillar has decided to return shareholders value, driven by its huge cash balance and strong cash flow. The company possessed cash and cash equivalents of $3.6 billion as of December 31, 2010, and cash from operating activities of $5.0 billion for the fiscal 2010.

Caterpillar has a long history of returning shareholders value. During the first quarter of fiscal 2011, the company bought back shares for $17.815 million and $8.624 million, maturing on February 15, 2016 and March 15, 2016, respectively.

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 the likes of CNH Global NV (CNH), Komatsu Ltd. (KMTUY) and Volvo AB (VOLVY).

 
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