Lockheed Martin Corporation (LMT) has issued US$2 billion in senior unsecured notes.
The issuance follows a 79% year-on-year loss for the second quarter of 2025, with the company reporting US$342 million in net earnings. Missing expectations of US$6.52, earnings per share were US$5.83.
In the firm’s earnings call, CEO and president James Taiclet attributed the loss to a classified programme.
“I acknowledge the losses on this classified program are significant. Again, we are taking these charges very seriously and have initiated changes in program team management and assigned experts across the company to approve the performance and oversight of this program under a comprehensive risk identification and corrective action plan,” he stated.
Of the US$2 billion senior unsecured notes, US$750 million was issued in 4.400% notes due 2030, a further US$750 million was issued in 5.000% notes due 2035, and the remaining US$500 million in 4.150 notes due 2028.
Interest will be paid twice annually, on 15 February and 15 August, effective 15 February 2026.
Proceeds will be used for general corporate purposes, including the repayment of maturing debt. US$500 million will mature this October, US$1 billion in January 2026 and US$168.4 million in May.
Citigroup Global Markets, Credit Agricole Securities USA and JP Morgan Securities served as underwriters.
Over the last month, LMT was the largest issuer in the North American industrial goods and services sector, followed by General Electric with a US$1.94 billion issuance.
Fitch assigned LMT’s notes an A rating, in line with the company’s existing senior unsecured debt. As a whole, the firm holds a long-term issuer default rating (IDR) of A, and a short-term IDR and commercial paper programme rating of F1. All ratings are stable.
These ratings are driven by strong profitability and high US defence spending, Fitch explained. International spending on the sector is also “highly favourable”, it added, if not as stable as the US. Currently 25-30% of the firm’s annual revenue comes from international customers, a figure Fitch expects to grow.
EBITDA leverage is forecast to remain at below 2.0x for the next several years.
LMT, the largest company in the global defence sector, is currently outperforming its peers in Fitch’s ratings. Compared to the UK’s BAE Systems (A-/stable), it shows healthier profitability and a stronger product range, the ratings agency said.
In the US, while L3Harris Technologies (BBB+/stable) has higher margins, it has a smaller scale, weaker leverage profile and reduced exposure as a prime contractor. Northrop Grumman Corporation (BBB+/stable) is similar to LMT in product offering and diversification, but has weaker credit metrics.
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