DBRS Assigns “A” Rating to New Caterpillar Notes Issues

DBRS has today assigned a rating of “A” with a Stable trend to the five tranches of debt totalling $4.5 billion of senior unsecured notes (collectively the Notes) to be issued by Caterpillar Inc. (CAT or the Company) on May 27, 2011. Proceeds of the Notes are to partially pay for the Company’s pending acquisition of Bucyrus International Inc. (Bucyrus; for further details, please refer to DBRS’s associated press release dated November 15, 2010). DBRS notes that the Company is also expected to use commercial paper as well as existing cash balances to complete the funding of the Bucyrus acquisition.
The individual tranches are outlined below:

• $500 million 18-month floating rate (3-mth LIBOR + 10bp) notes maturing November 21, 2012
• $750 million 2-year floating rate (3-mth LIBOR + 17bp) notes maturing May 21, 2013
• $750 million 1.375% 3-year fixed rate notes maturing May 27, 2014
• $1.25 billion 3.9% 10-year fixed rate notes maturing May 27, 2021
• $1.25 billion 5.2% 30-year fixed rate notes maturing May 27, 2041

The Notes will rank equally in right of payment with all of CAT’s other existing and future senior unsecured indebtedness. The Notes also feature a special mandatory redemption provision that would be triggered in the event that the merger of Bucyrus is not completed by June 30, 2012; in which case the Notes would be redeemed at 101% of principal (plus accrued and unpaid interest).

Note:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodology is Rating the Industrial Products Industry, which can be found on our website under Methodologies.