Summary
Fox Corporation (FOXA) filed an 8-K on April 2, 2020, to report two significant financial events. Firstly, the company amended its existing credit agreement, primarily to adjust the calculation of its operating income leverage ratio by excluding cash in excess of $500 million. This amendment also addresses changes related to new lease accounting standards. Secondly, and more notably for investors, Fox Corp entered into an Underwriting Agreement for a public offering of $1.2 billion in senior notes. The offering consists of $600 million in 3.050% senior notes due 2025 and $600 million in 3.500% senior notes due 2030. The net proceeds from this substantial debt offering are intended for general corporate purposes. The offering was made under a shelf registration statement and was expected to close on April 7, 2020. These actions indicate proactive capital management by Fox Corp, likely to ensure liquidity and financial flexibility during a period of economic uncertainty.
Key Highlights
- 1Fox Corp amended its Credit Agreement on April 1, 2020, to modify the operating income leverage ratio calculation by excluding cash above $500 million.
- 2The credit agreement amendment also accounts for the adoption of new lease accounting principles.
- 3On March 31, 2020, Fox Corp entered into an Underwriting Agreement for a public offering of senior notes.
- 4The offering involves $600 million of 3.050% senior notes due 2025.
- 5The offering also includes $600 million of 3.500% senior notes due 2030, totaling $1.2 billion in new debt.
- 6Proceeds from the senior notes offering are designated for general corporate purposes.
- 7The offering was expected to close on April 7, 2020, subject to customary closing conditions.