BSkyB Raises $5.2B Through Debt Sales

LONDON (The Deal) -- The U.K.'s British Sky Broadcasting Group on Wednesday said it had priced four issues of euro and dollar-denominated senior unsecured bonds to raise 3.25 billion pounds ($5.2 billion) toward the purchase of leading shareholder 21st Century Fox's Italian and German pay-TV interests.

The Isleworth, England group sold 1.5 billion euros ($1.94 billion) of senior unsecured notes with a 1.5% coupon and a 2021 maturity; 1 billion euros of senior unsecured notes which mature in 2026 and have a 2.5% coupon; $750 million of notes maturing in 2019 with a coupon of 2.625%; and another $1.25 billion of notes paying out 3.75% and maturing in 2024.

The July deal with 21st Century Fox for Sky Italia Sarl and its 57.4% stake in Sky Deutschland Holding AG is worth about 5.3 billion pounds in cash and assets and BSkyB will pay up to another 2.52 billion euros for the 42.6% of Sky Deutschland that is in freefloat.

The bond issue comes a week after BSkyB published its offer document for the related offer to Sky Deutschland minority shareholders. That offer is priced at 6.75 euros per share, the same price that BSkyB is paying for the 21st Century Fox stake, but it remains unclear whether the U.K. company can secure the 75% holding it needs to get a so-called domination agreement and therefore access to Sky Deutschland's cash flow. Crispin Odey's Odey Asset Management LLP said in July it won't tender its roughly 8% stake to the offer. The Sky Deutschland tender will run until Oct. 15.

BSkyB's gross debt will increase to 5.84 billion pounds, from 2.59 billion pounds, based on the June 30 figure, as a result of the bond offering.

BSkyB shares were little changed in London on Wednesday, down 1 pence at 880.50 pence, valuing the stock at about 15.1 billion pounds.

Barclays plc, JPMorgan & Co., Morgan Stanley and Banco Santander SA handled the bond offers.

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