European DTH giant Sky has priced €500m (US$536.6m) of euro notes as it looks to refinance bonds and keep the overall pre-tax cost of its debt below 4% per annum. Barclays, JP Morgan and Lloyds are active bookrunners on the 2.25% bond due 2025.
European DTH giant Sky (LSE:SKY) has priced €500m (US$536.6m) of euro notes as it looks to refinance bonds and keep the overall pre-tax cost of its debt below 4% per annum.
The 2.25% fixed-rate bond due 2025 comes a year after it began consolidating assets through multibillion dollar takeovers of sister companies in Italy and Germany.
Barclays, JP Morgan and Lloyds are understood to be active bookrunners on the bond, to be issued on 17 November, with Mizuho and Unicredit mandated as passive bookrunners.
Sky said that, after swapping the issue into fixed rate sterling and other costs, the blended pre-tax cost of the notes will be 4% per annum, while the average maturity across its total bond portfolio will remain about 7.5 years.
Standard & Poor’s and Moody’s have given the satellite broadcaster BBB (stable) and Baa2 (stable) ratings, respectively.
The UK-based company hailed a strong start to its fiscal year when it announced results for the three months to the end of September, showing a 6% rise in group revenue to £2.8bn (US$4.23bn) and a 10% jump in operating profit to £375m (US$566.7m).
It recorded £6.042bn (US$9.13bn) in net debt at the end of the quarter, up – as expected – from paying €238m (US$255.4m) on completing its Sky Deutschland squeeze-out, seasonal cash out flows, and the retranslation of €7.4bn (US$7.94bn) in euro denominated debt at a higher exchange rate.
The group recently repaid US$750m of 5.625% bonds issued in October 2005 from available cash on their maturity. It said the ratio of net debt to annualised EBITDA at 30 September was about 2.8 times.
Fox still not happy with Sky stake
21st Century Fox (NASDAQ:FOX) CEO James Murdoch said last month that the US media conglomerate is not happy about being a partial shareholder in Sky, reviving speculation of either a takeover or sale in the future.
Murdoch told The Hollywood Reporter that having about 39% of an unconsolidated asset is “not an end state that is natural for us”.
He added “there are no plans on the agenda right now”, as Fox focuses on supporting Sky’s integration following its takeovers of Sky Deutschland and Sky Italia.
Fox’s plans for Sky have been the subject of speculation since the Murdoch family was forced to withdraw a takeover bid in 2011, following widespread criticism over a phone hacking scandal in the UK.
Murdoch, who was promoted to CEO of Fox in June, would likely face another highly politicised battle to take over Sky. Some industry observers believe Fox is more likely to sell its stake in the group.
To pave the way for Sky’s European integration, Fox sold 100% of Sky Italia for nearly US$4bn, and a 57% stake in Sky Deutschland for about US$4.7bn.
Fox was formed in 2013 after it was split away from the News Corp publishing firm that was involved in the hacking scandal.
