DTH provider Sky (formerly BSkyB) has raised £1.75bn (US$2.75bn) in a quadruple-tranche multi-currency senior unsecured bond offering.
The company issued £450m (US$706m) of 2.875% notes due 2020, €850m (US$1.06bn) of 1.875% notes due 2023, £300m…
DTH provider Sky (formerly BSkyB) has raised £1.75bn (US$2.75bn) in a quadruple-tranche multi-currency senior unsecured bond offering.
The company issued £450m (US$706m) of 2.875% notes due 2020, €850m (US$1.06bn) of 1.875% notes due 2023, £300m (US$470.5m) of 4% notes due 2029, and €400m (US$501m) of 2.75% notes due 2029.
SatelliteFinance understands that Morgan Stanley, JP Morgan and Barclays were lead bookrunners on the offering.
According to one source, the reason for the dual currency issuance is purely down to the company seeking to secure the most attractive pricing at the time of the offering.
The transaction concludes Sky’s financing requirements for its acquisitions of Sky Italia and Sky Deutschland, which were completed on 12 November 2014.
Sky’s is paying an aggregate £6.9bn (US$10.8bn) for 89.71% of Sky Deutschland and 100% of Sky Italia. The consideration is being funded through a mix of debt, equity, cash and assets.
Having netted £481m (US$754m) in proceeds from the sale of its 6.4% stake in UK national broadcaster ITV in July, Sky then raised £3.25bn (US$5.1bn) in a Euro and US dollar denominated senior unsecured bond offering in September.
It has since raised £1.36bn (US$2.13bn) through an equity placement representing 9.99% of its outstanding share base and has now completed a second bond offering worth £1.75bn.
In addition, around £380m (US$596m) of the balance of the Sky Italia acquisition was paid through the sale of BSkyB’s 21% stake in National Geographic Channels International to the Italian firm’s 100% owner 21st Century Fox.
The enlarged group has around 20 million customers across Italy, Germany, Austria, the UK and Ireland. The satellite broadcaster said it will also be one of the largest employers in the sector, with 31,000 staff.
Sky is rated BBB by Standard & Poor’s and Baa2 by Moody’s. Fellow ratings agency Fitch recently downgraded Sky to BBB-. The company said this reflect the expectation that Sky’s forecast fiscal year 2015 (year ending June 2015) net adjusted leverage will increase to around 3.5x.
However, Fitch acknowledges the Sky management’s deleveraging plan which expects to reduce net debt/EBITDA by between 0.5x and 0.7x by June 2016 with the intention of maintaining a leverage of 2x in the medium term.
