The cash likely will be used to help Discovery pay for its planned $1.7B acquisition of ProSiebenSat.1 Group’s SBS Nordic operations — and possibly the $1B increase the company announced last year in its stock repurchase plan. Discovery will raise funds from two sales of senior unsecured notes: it will pay 3.250% a year in interest for $350M in notes due in 2023, and 4.875% interest for $850M due in 2043. (The rates and maturity periods are remarkably similar to those in the $550M borrowing plans that Viacom announced yesterday.) Discovery’s taking advantage of the market’s low interest rates and its investment-grade debt ratings from Moody’s Investors Service (which classifies the company as Baa2), Standard & Poor’s (BBB) and Fitch (BBB). Discovery’s upbeat about the performance of its operations and says the SBS deal and a strategic alliance with France’s TF1 will help. But Moody’s calls its deals “an aggressive use of cash and debt that increase leverage and will weakly position the company within the Baa2 rating category for the next 12- 18 months.” The joint bookrunners on the debt sale are J.P Morgan, Merrill Lynch, Credit Suisse, Citigroup, and RBS Securities.
Discovery To Borrow $1.2B After Its Dealmaking Spree
Trending Now on Deadline
More From Lieberman
- Does Alibaba Plan To Take Control Of Lionsgate?
- FCC Postpones Auction Of Broadcast TV Spectrum To 2016
- When Will Big Hollywood Studios Aggressively Produce Original Shows For Digital TV?
- AMC Networks And BBC Chiefs On The Future Of BBC America
- AMC Networks Pays $200M For 49.9% Of BBC America
- Amazon Shares Fall After Q3 Losses Exceed Expectations