Xylem Inc. Completes $1.5B Senior Notes Offering to Fund Acquisition

What Happened
Xylem Inc. announced it completed a public offering of $1.5 billion aggregate principal amount of senior unsecured notes on September 29, 2026. The offering consists of three series: $500 million of 5.250% notes due September 28, 2029; $500 million of 5.450% notes due January 15, 2032; and $500 million of 5.850% notes due January 15, 2037. Xylem said it will use the net proceeds, together with cash on hand, to finance all or part of the previously announced acquisition of the Cornell Pump and Roper Pump businesses, to pay related costs and for general corporate purposes.

Key Details

• Total raised: $1,500,000,000 (three $500M series).
• Interest rates and maturities: 5.250% due 9/28/2029; 5.450% due 1/15/2032; 5.850% due 1/15/2037. Interest paid semiannually (2029 Notes: Mar/Sept 28; 2032 & 2037 Notes: Jan/July 15).
• Notes are senior unsecured obligations, ranking equally with other unsecured, unsubordinated debt.
• Conditional mandatory redemption: if the Acquisition is not consummated by the later of August 10, 2027 (or any agreed extension) or if the purchase agreement is terminated or Xylem notifies the trustee it will not pursue the deal, Xylem must redeem all notes at 101% of principal plus accrued interest.
• Other protections/covenants: customary limits on secured debt liens, sale-leaseback transactions and certain mergers/consolidations; change-of-control repurchase required (at 101%) if followed by specified rating downgrades.
• Offering mechanics: issued under Xylem’s Form S-3 registration (File No. 333-297937) and sold via an underwriting agreement dated Sept. 15, 2026; Sixth Supplemental Indenture dated Sept. 29, 2026.

Why It Matters
This financing provides Xylem with committed capital to complete the Cornell and Roper Pump acquisition while spreading repayment across three maturities. For investors, the new notes increase the company’s fixed-rate interest obligations (at mid-5%+ rates), which will raise interest expense relative to previous lower-rate debt. The mandatory redemption if the Acquisition fails means Xylem could need to repay the notes (at a 101% premium), which would be a near-term cash requirement unless the deal closes or is extended. The notes are unsecured and rank equally with other unsecured debt, so they affect the company’s overall leverage profile but do not encumber specific assets.