This article first appeared on GuruFocus.
United Launch Alliance, the rocket company owned by Boeing (NYSE:BA) and Lockheed Martin (NYSE:LMT), is seeking about $1.5 billion through a private bond transaction, expanding the planned financing to roughly three times its original size, according to a Bloomberg report.
The offering consists of four debt tranches with maturities ranging from three years to 10 years. ULA had initially targeted $500 million, according to the report.
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The financing comes as ULA continues providing launch services to the U.S. military as well as commercial customers, including Amazon (AMZN). The debt proceeds could provide additional financial flexibility for the launch business, although the supplied information does not specify how the funds will be used.
ULA also recently appointed Mark Peller as its president and chief executive officer. Peller is a veteran aerospace executive and assumed the position immediately, according to the report.
The larger-than-planned bond transaction highlights the financing needs of the space and defense sector as companies invest in launch capabilities and compete for government and commercial contracts.
The deal adds financing capacity to their joint rocket venture, but investors will likely focus on borrowing costs and how effectively ULA deploys the additional capital.