Deere Issues $500M 4.15% Notes Due 2030

Deere Funding Canada completed a $500 million sale of senior unsecured notes carrying a 4.15% coupon and maturing in 2030. As an unsecured instrument, these notes rank as general senior obligations rather than secured borrowings. The issuance expands Deere-related paper in the medium-term debt market and is presented alongside Deere & Company's broader financing activities. Deere & Company's Financial Services (FS) segment historically underpins equipment sales by providing retail notes, leases and revolving accounts to dealers and customers. At the end of the most recent reporting period FS receivables and leases totaled $56,938 million (down from $59,428 million). Retail notes were concentrated in agriculture/turf ($26,555 million, ~81% of retail notes) and construction/forestry ($6,102 million, ~19%). Equipment operations reported net sales of $10,224 million in the latest fiscal period (a 7% decline from $10,969 million the prior year), while FS revenue was $6,289 million (down 3%). Investors should view the note sale in the context of Deere's integrated capital and finance model: equipment sales generate receivables that FS funds through a mix of financing sources, of which unsecured note issuance is one component. Market interest-rate conditions noted earlier in the year (elevated in H1 2025) are a relevant backdrop when assessing the fixed 4.15% coupon on a five-year horizon to 2030.

Credit and repayment risk: Deere's FS portfolio has shown modest deterioration in some metrics: FY2025 credit loss provision was 0.49% of average receivables and delinquency rose to 1.05% from 0.98% year over year. Those trends are relevant for holders of unsecured notes because FS performance affects consolidated cash flow available for debt service. Legal and regulatory exposure: Deere faces active legal and regulatory risks that could affect future profitability and cash flow. A 2025 FTC lawsuit alleges monopolization/unfair competition linked to restricting repair tools to authorized dealers; a motion to dismiss was denied and preliminary resolution discussions are ongoing. A separate multidistrict class action in the Northern District of Illinois also alleges restraints in the repair market. Additionally, right-to-repair legislation and trade policy (including tariffs and retaliatory measures) are cited as regulatory and cost risks. Macro and competitive risks: Deere's equipment markets are sensitive to commodity prices, farm income and interest rates; high used inventory and liquidity stress in parts of the farm economy were noted in filings. Market competition is meaningful—peers cited in performance comparisons include Caterpillar, PACCAR and RTX. Filings explicitly state that Deere does not show evidence of a sustainable economic moat; advantages derive from execution (dealer network, production systems and technology stack) rather than insurmountable structural barriers. Debt structure note: These notes are senior unsecured obligations. Investors should factor in Deere's overall leverage, liquidity position and the unsecured nature of the issue when assessing recovery prospects relative to secured debt.