Summary
This 8-K filing from Discovery Communications, Inc. (the Guarantor) and Discovery Communications, LLC (DCL) on August 12, 2009, announces the issuance and sale of $500 million aggregate principal amount of 5.625% Senior Notes due 2019. The primary purpose of this offering is to strengthen DCL's balance sheet by repaying approximately $428 million of existing indebtedness under its Term Loan A, which is due to mature in October 2010. The remaining proceeds are designated for general corporate purposes. This debt issuance is a strategic move by Discovery to manage its debt maturities and improve its financial flexibility. The Notes will be senior unsecured and unsubordinated obligations of DCL, fully guaranteed by Discovery Communications, Inc. Investors should note the closing is expected on August 19, 2009, subject to customary conditions. The filing also includes supporting legal opinions and a computation of the company's ratio of earnings to fixed charges, providing transparency on its debt servicing capabilities.
Key Highlights
- 1Discovery Communications, LLC (DCL) is issuing $500 million of 5.625% Senior Notes due 2019.
- 2The offering is being conducted through an underwriting agreement with Citigroup Global Markets Inc. and J.P. Morgan Securities Inc.
- 3Net proceeds are expected to be approximately $493 million after fees and expenses.
- 4A significant portion of the proceeds, about $428 million, will be used to repay existing Term Loan A indebtedness maturing in October 2010.
- 5The remaining funds will be utilized for general corporate purposes.
- 6Discovery Communications, Inc. (the Guarantor) is providing an unsecured and unsubordinated guarantee for the Notes.
- 7The offering is expected to close on August 19, 2009, contingent on standard closing conditions.