Westinghouse Air Brake Technologies Corporation (NYSE: WAB) announced on May 29, 2025, a significant capital markets transaction involving the issuance of \(1.25 billion in senior notes. This offering comprised \)500 million of 4.900% Senior Notes due 2030 and $750 million of 5.500% Senior Notes due 2035. The notes were issued under the company’s existing shelf registration and are fully and unconditionally guaranteed by Wabtec’s subsidiaries, underpinning their senior unsecured status.
The 2030 Notes carry an interest rate of 4.900% per annum with maturity on May 29, 2030, while the 2035 Notes carry a higher coupon of 5.500% due May 29, 2035. Interest payments on these notes are scheduled semi-annually on May 29 and November 29, beginning November 29, 2025. The issuance includes customary redemption features, including “make-whole” premiums and “par call” options one month and three months prior to maturity, respectively.
This strategic issuance allows Westinghouse Air Brake Technologies Corp to bolster its liquidity position and optimize its capital structure amid evolving economic conditions. As of the fiscal year ended December 31, 2024, WAB reported total liabilities of \(8.569 billion and long-term debt of \)3.48 billion, with total shareholders’ equity standing at approximately \(10.09 billion. The new notes increase the company's long-term debt by approximately 36% if added to the existing \)3.48 billion, indicating a proactive approach to funding growth initiatives and managing existing debt maturities.
With an effective tax rate of 24.33% for FY 2024 and an interest expense of $201 million, WAB’s cost of debt will incrementally increase due to the issuance, given the coupon rates. The long-term debt to equity ratio currently stands at a moderate 0.3449, with the new debt likely increasing leverage slightly but maintaining balance sheet flexibility.
In recent earnings calls, the company emphasized disciplined capital allocation and leveraging debt markets to support sustainable growth in rail and transportation technology sectors. This note issuance aligns with those strategic priorities, providing a reliable funding source while preserving operational agility.
For investors and market participants, this $1.25 billion senior notes offering is a clear signal of Westinghouse Air Brake Technologies Corp’s commitment to financial robustness and strategic growth. The company’s ability to secure favorable terms under current market conditions reflects strong creditworthiness and investor confidence.
Source document: Westinghouse Air Brake Technologies 8-K Filing