Caterpillar Inc. (CAT) has redeemed notes issued earlier by Caterpillar Financial Services, for a total amount of $7.57 million. The company decided to redeem 100% of the remaining amount.
The three notes that the company redeemed have coupon rates of 5.5%, 5.6% and 5.25%, with redemption prices of $2.809 million, $3.188 million and $1.573 million, respectively. The date of maturity for two notes is April 15, 2027, while the third note is maturing on April 15, 2023.
Almost simultaneously, the company decided to redeem another three notes issued by its financial wing, for a total amount of $16 million. Out of these three, one with a coupon rate of 5.5% is to be redeemed at a price of $6.348 million, another with a coupon rate of 5.65% would be redeemed at a price of $1.942 million and the third one bearing a coupon rate of 5.75% will be redeemed at $7.712 million. All the notes mature on April 15, 2023.
During March, Caterpillar redeemed a total debt of $15.15 million, comprising six notes. 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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