8-KMaterial AgreementsFinancial EventsExhibits & Filings

Warner Bros. Discovery, Inc. 8-K Report, Material Agreement (Aug 19, 2009)

Filed August 19, 2009For Securities:WBD

Summary

This 8-K filing from Warner Bros. Discovery, Inc. (though filed under Discovery Communications, LLC at the time) reports on the completion of a registered offering of $500 million aggregate principal amount of 5.625% Senior Notes due 2019. The offering, underwritten by major financial institutions, saw the Notes sold at a slight discount, yielding net proceeds of approximately $493 million after expenses. These proceeds are primarily earmarked for the repayment of $428 million in outstanding indebtedness under its Term Loan A facility, which was set to mature in October 2010. The remainder of the funds will be utilized for general corporate purposes, indicating a strategic move to refinance existing debt and strengthen the company's liquidity position.

Key Highlights

  • 1Discovery Communications, LLC (DCL) successfully raised $500 million through a public offering of Senior Notes.
  • 2The Notes carry a coupon of 5.625% and mature on August 15, 2019.
  • 3Net proceeds of approximately $493 million were generated after underwriting discounts and expenses.
  • 4A significant portion of the proceeds ($428 million) will be used to repay outstanding debt under the Term Loan A facility.
  • 5The Notes are unsecured and rank equally with DCL's other unsecured senior indebtedness.
  • 6Discovery Communications, Inc. fully and unconditionally guarantees the Notes on an unsecured and unsubordinated basis.
  • 7The offering represents a proactive debt management strategy to refinance near-term maturities.

Frequently Asked Questions

The primary purpose of the offering is to refinance existing debt. Specifically, the company intends to use approximately $428 million of the net proceeds to repay indebtedness outstanding under its Term Loan A facility, which was approaching maturity.

The Senior Notes have an aggregate principal amount of $500 million, bear interest at a rate of 5.625% per year, and mature on August 15, 2019. Interest payments are scheduled semi-annually, beginning February 15, 2010. The notes are unsecured and guaranteed by Discovery Communications, Inc.

After deducting the underwriting discount and estimated offering expenses, Discovery Communications, LLC received net proceeds of approximately $493 million from the offering.

The full and unconditional guarantee from Discovery Communications, Inc. provides an additional layer of credit support for the Senior Notes, making them more attractive to investors by enhancing their creditworthiness. It signifies the parent company's commitment to the debt obligations of DCL.