Defence contractor BAE Systems has unveiled plans to raise $1.3 billion (£1.1 billion) through the bond markets to plug part of the £1.9 billion hole in its pension scheme.
BAE, which runs shipyards on the Clyde and at Rosyth, announced a deal in February with its pension trustees to help tackle the deficit in its retirement scheme. The business said it would make a one-off payment of £1 billion “in the coming months” on top of the £240 million promised in 2019-20 and a further £250 million in 2020-21.
Its bond will pay interest to investors at a rate of 3.4% each year and will mature on 15 April 2030. The deadline for the bond offer to close has been set for 14 April.
The FTSE100 group is part of the “VentilatorChallengeUK” consortium that’s making medical equipment to help the National Health Service to tackle the Covid-19 crisis. Ventilators breath for patients when they are no longer able to use their lungs.
BAE said last week: “Our role in VentilatorChallengeUK is to help ramp up production of a proven ventilator design, which has been supplied by a leading UK medical company to help those suffering from the virus.
"We will be providing integrated, tested sub-systems and components, which makes best use of our strong project management and engineering skills, while saving significant time during final assembly of the ventilators.”
