At a time when companies are increasingly favoring shareholders, Ingersoll-Rand Plc is keeping bondholders happy by cutting $1 billion of its $3.6 billion of debt.
The maker of security systems and Trane air conditioners, rated Baa1 by Moody’s Investors Service and BBB+ at Standard & Poor’s, retired $345 million of notes this month and plans to repay $600 million of debt due in 2013. That would trim leverage to a level qualifying Swords, Ireland-based Ingersoll-Rand for A ratings, according to debt researcher CreditSights Inc.
The company has $655 million of 9.5 percent notes that come due in April 2014, Bloomberg data show. The debt traded April 17 at 115.2 cents on the dollar to yield 1.67 percent, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
Shares of the company rallied to $42.09 at 11:01 a.m. today in New York from $26.48 in October, when the European debt crisis roiled global markets. The stock dropped as low as $11.84 in March 2009 as the S&P 500 Index bottomed during the worst financial crisis since the Great Depression.