Donaldson lines up $1.5B note facility, starts with $250M sale
What's the deal? Donaldson CompanyDealroom has a profile for this one. Try Dealroom → has entered a note purchase agreement allowing it to issue up to $1.5 billion in senior unsecured notes, starting with a $250 million private placement to institutional investors. The initial Series 2026-A notes are expected to close on January 12, 2027.
The details: The $250 million splits into three fixed-rate tranches — $125 million at 5.93% due 2032, $75 million at 6.10% due 2034, and $50 million at 6.23% due 2037. The $1.5 billion is the agreement's ceiling, not the amount being issued now.
Why now? The financing follows Donaldson's $829 million all-cash acquisition of Facet FiltrationDealroom has a profile for this one. Try Dealroom → in May 2026, which increased net debt and expanded its aerospace, defense, and power-generation exposure.
What's the endgame? The notes add long-term funding capacity after a major deal. Donaldson, which makes filtration systems, reported record fiscal-2026 sales of $3.9 billion and had repaid $102 million of Facet-related debt by year-end, leaving net leverage at about 1.4 times EBITDA.
The fine print: The agreement carries debt-to-EBITDA and priority-debt covenants, plus restrictions on liens, asset sales, and mergers. If a change of control occurs, Donaldson must offer to prepay all outstanding notes at 100% of principal plus accrued interest.
The signal: This reads as balance-sheet flexibility rather than financial strain. By locking in fixed-rate, long-dated debt, Donaldson is funding its expansion without tapping equity markets — a conservative play that keeps leverage in check while it integrates its largest recent acquisition.
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