UK-based satellite broadcaster BSkyB has raised US$800m through a ten-year bond offering, its first bond financing since it raised US$582.8m of 9.5% 10-year notes in November 2008.
The new senior unsecured notes, which mature 26 November 2022 and notes…
UK-based satellite broadcaster BSkyB has raised US$800m through a ten-year bond offering, its first bond financing since it raised US$582.8m of 9.5% 10-year notes in November 2008.
The new senior unsecured notes, which mature 26 November 2022 and notes are rated Baa1 by Moody’s and BBB+ by Standard & Poor’s, carry a coupon of 3.125% and priced at 99.566 to yield 3.139%.
Barclays, BNP Paribas, JP Morgan, Morgan Stanley and Societe Generale were joint bookrunners on the transaction.
Net proceeds are to be used for general corporate purposes, including refinancing the company’s existing debt. BSkyB added that it may use a portion of the offering to help fund potential acquisitions.
The DTH provider has approximately £2.22bn (US$3.55bn) worth of existing notes, both sterling and dollar denominated, as well as an undrawn £743m revolver. The first of these due to mature is the US$750m outstanding of 5.625% notes due October 2015. Beyond this, BSkyB has £400m of 5.75% notes due October 2017, US$750m of the 6.1% notes due February 2018, US$582.8m of 9.5% notes due November 2018, £300m of 6% notes due May 2027 and US$350m of 6.5% notes due October 2035.
The low coupon on these latest notes in comparison highlights how receptive the US bond market was to the offering. SatelliteFinance understands that the debt was substantially oversubscribed with investors’ primarily US-based, accounting for approximately 78% of the take-up.
BSkyB has also been ramping up its share buyback programme over the past month. Having announced in July that it intended to undertake a new £500m buyback plan, the company then secured approval at its annual general meeting on 1 November. Since that date, BSkyB has bought back and cancelled almost 14 million shares at a cost of around £110m. It currently has approximately 1,636,311,965 shares outstanding.
The share buyback programme follows a similar £750m plan in the latter half of 2011. That scheme came about in part as a way to appease the company’s shareholders in the wake of News Corp’s abandoned £7.8bn takeover bid. BSkyB’s share price fell sharply after News Corp’s acquisition plans were scuppered in the aftermath of the phone hacking scandal and in response the board announced a £253m 20% increase to its dividend and £750m share buyback plan.
