8-KOther EventsExhibits & Filings

Fox Corp 8-K Report, Corporate Update (Apr 7, 2020)

Filed April 7, 2020For Securities:FOXAFOX

Summary

Fox Corporation (FOXA) has filed an 8-K report detailing the successful completion of a public offering of $1.2 billion in aggregate principal amount of senior notes. This offering consisted of $600 million of 3.050% senior notes due in 2025 and $600 million of 3.500% senior notes due in 2030. The issuance, which closed on April 7, 2020, was conducted under an effective shelf registration statement. The net proceeds from this offering were not explicitly stated, but the company has raised substantial debt capital. These notes are senior unsecured obligations of Fox Corporation, with potential subsidiary guarantees in certain circumstances outlined in the indenture. The company has the option to redeem these notes under specific conditions, including a make-whole provision and redemption at par after certain dates. Importantly, a change of control triggering event would require the company to offer to repurchase the notes at 101% of their principal amount, plus accrued interest. Investors should note that these indentures include customary covenants, such as limitations on secured debt.

Key Highlights

  • 1Fox Corp closed a $1.2 billion public offering of senior unsecured notes on April 7, 2020.
  • 2The offering comprised $600 million of 3.050% notes due 2025 and $600 million of 3.500% notes due 2030.
  • 3The notes are governed by an indenture dated January 25, 2019, with The Bank of New York Mellon as trustee.
  • 4Subsidiaries may guarantee the notes on a senior unsecured basis under specific circumstances post-issuance.
  • 5The company retains the option to redeem notes, with terms including a make-whole provision and a par redemption option for each series.
  • 6A change of control triggering event mandates the company to offer to repurchase notes at 101% of face value plus accrued interest.
  • 7The indenture includes standard covenants, such as restrictions on secured debt.

Frequently Asked Questions

This 8-K filing announces the closing of Fox Corporation's public offering of $1.2 billion in senior notes, providing investors with details about the terms, maturity dates, interest rates, and redemption provisions of these new debt instruments.

Fox Corp has raised significant debt capital, increasing its leverage. While the exact use of proceeds is not detailed in this filing, the new notes will carry interest expenses. Investors should consider the impact on the company's debt-to-equity ratio and interest coverage metrics. The company retains flexibility with redemption options, which could be utilized to manage its debt structure.

The notes are senior unsecured obligations. Key protections include the company's obligation to offer to repurchase the notes at 101% of their principal amount, plus accrued interest, in the event of a change of control triggering event. Additionally, the indenture contains customary covenants, such as limitations on secured debt, which restrict the company's ability to incur additional secured indebtedness.

The 3.050% senior notes due 2025 mature on April 7, 2025, with semi-annual interest payments on April 7 and October 7, starting October 7, 2020. The 3.500% senior notes due 2030 mature on April 8, 2030, with semi-annual interest payments on April 8 and October 8, starting October 8, 2020.