A subsidiary of CNH Global N.V. (CNH) recently sold senior unsecured notes worth $1.5 billion. The notes bear a coupon rate of 7.875% and will mature in 2017. The issue price is 99.32% and the notes carry a yield of 8.0%. 
Based in Amsterdam, the Netherlands, CNH Global N.V. is a subsidiary of Fiat Netherlands Holding N.V, which has an approximately 90% stake in the company. 

CNH Global N.V. engages in engineering, manufacturing, marketing, and distribution of agricultural and construction equipment on a worldwide basis. 

The offering represents an increase from the previously announced size of $1.0 billion and will close on June 28, 2010.
 
Interest will be paid on a semi-annual basis. Moody’s rates the notes as Ba3 (speculative grade subject to substantial credit risk) and S&P gave a BB+ rating (junk or non-investment grade rating). 

The company already had $9.4 billion of debt as of December 31, 2009 and equity of $6.8 billion. Debt-to-capitalization ratio was at a high of 58% at year-end 2009. The company also had cash and equivalents of $1.3 billion at the end of 2009. This translates to a net-debt (less of cash)-capitalization ratio of 46%. 

As of December 31, 2009, $432 million was allocated to CNH Global by Fiat under a $1.4 billion Fiat credit facility syndicated with third parties, which is currently scheduled to mature in August 2010. On December 31, 2009, CNH Global owed approximately $2.9 billion or 31% of total debt to Fiat and its affiliates. 

The company intends to use the proceeds from the offering primarily for the repayment of debt, which includes 7.125% senior notes due 2014 worth $500 million and repayment of debt owed to Fiat. The remaining proceeds, if any, will be used for general corporate purposes.

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