The notes were priced at a public offering price of 99.936% of par for the 2029 notes and 99.678% of par for the 2036 notes, plus accrued interest, if any, from March 2, 2026. Underwriting discounts were 0.350% for the 2029 notes and 0.650% for the 2036 notes, producing proceeds to Leidos, before expenses, of 99.586% and 99.028% of par, respectively. The company estimated net proceeds of approximately $1,387 million after underwriting discounts and estimated offering expenses. The notes settled on March 2, 2026, the seventh business day after the final prospectus supplement, pursuant to an indenture dated October 8, 2020 among Leidos, Inc. as issuer, Leidos Holdings as guarantor, and Citibank, N.A. as trustee, as supplemented by an officers' certificate dated March 2, 2026.
The use of proceeds is specific: Leidos intends to use the net proceeds to fund a portion of the consideration payable for its proposed acquisition of all outstanding shares of capital stock of KENE Parent, Inc. (referred to in the filings as "ENTRUST"), pursuant to a Stock Purchase Agreement dated January 23, 2026 among Leidos, Inc., KENE Holdings, L.P. and KENE Parent, Inc. Leidos disclosed a purchase price of approximately $2.4 billion in cash for that acquisition, subject to certain adjustments, to be funded through a combination of new debt (including these notes), cash on hand, and commercial paper. As of the February 2026 prospectus supplement, that acquisition was expected to close by the end of the second quarter of 2026, subject to customary closing conditions including regulatory approvals; the notes offering itself was not conditioned on completion of that acquisition. Pending use of proceeds, Leidos said it may temporarily deploy the funds for general corporate purposes or short-term, liquid investments; the proceeds were not placed in escrow.
The notes carry a special mandatory redemption feature tied to the Entrust/KENE acquisition: if that acquisition is not consummated by the later of August 14, 2026 (the "End Date") or five business days after any extended End Date under the acquisition agreement, or if Leidos notifies the trustee it will not pursue the acquisition, Leidos must redeem all of the notes at a special mandatory redemption price equal to 101% of principal plus accrued and unpaid interest to, but excluding, the redemption date. Separately, each series is also subject to an ordinary make-whole optional redemption at any time prior to its par call date (February 15, 2029 for the 2029 notes; December 15, 2035 for the 2036 notes), priced at the greater of par or a Treasury Rate-plus-spread calculation (10 basis points for the 2029 notes, 15 basis points for the 2036 notes), and at par thereafter. Holders may also require Leidos to repurchase the notes at 101% of principal plus accrued interest upon a Change of Control Triggering Event. The indenture includes a limitation-on-liens covenant permitting Leidos and the parent guarantor to incur secured debt without equally and ratably securing the notes so long as Leidos Holdings' "Aggregate Debt" does not exceed 15% of its Consolidated Net Worth, along with a related limitation on sale-and-leaseback transactions; no specific credit ratings for the notes are disclosed in the filings reviewed.
The notes are senior unsecured obligations of Leidos, Inc., ranking equally with its other existing and future senior indebtedness, and are structurally subordinated to liabilities of non-guarantor subsidiaries. A capitalization table in the prospectus supplement shows Leidos Holdings' pro forma long-term debt rising from $4,648 million (actual, as of January 2, 2026) to $6,048 million as adjusted for this offering, alongside existing senior unsecured notes due 2030, 2031, 2032 (two tranches), 2033 (two tranches), 2035, and 2040, and a term loan due March 2028.
Citigroup Global Markets Inc., BofA Securities, Inc. and MUFG Securities Americas Inc. acted as representatives of the underwriters and, together with Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, PNC Capital Markets LLC, Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc. and U.S. Bancorp Investments, Inc., served as joint book-running managers; BMO Capital Markets Corp., Regions Securities LLC and TD Securities (USA) LLC served as senior co-managers. Davis Polk & Wardwell LLP acted as counsel to Leidos, and Cravath, Swaine & Moore LLP acted as counsel to the underwriters.
The notes offering itself has closed (settled March 2, 2026), but it was conducted ahead of and to help finance the pending Entrust/KENE Parent acquisition, which as of the cited filings remained subject to regulatory approval and was not yet confirmed closed in the documents reviewed. No rating-agency press releases were identified among the filings reviewed.