Published on 2/28/2017 in the Prospect News Investment Grade Daily.
New Issue: Discovery Communications sells $650 million senior notes due 2024 and 2026
By Cristal Cody
Tupelo, Miss., Feb. 28 – Discovery Communications, LLC priced $650 million of senior notes (Baa3/BBB-/BBB-) in two parts on Tuesday, according to a market source and an FWP filing with the Securities and Exchange Commission.
The company priced $450 million of 3.8% notes due 2024 at 99.811 to yield 3.831%, or Treasuries plus 165 basis points.
Discovery Communications sold $200 million in a reopening of its 4.9% notes due March 11, 2026 at 105.038 to yield 4.206%. The notes priced at a spread of 185 bps over Treasuries.
The company originally sold $500 million of the notes on March 8, 2016 at 99.633 to yield 4.947%, or 312.5 bps over Treasuries. The total outstanding now is $700 million.
Both tranches priced on the tight side of guidance.
Barclays, Citigroup Global Markets Inc., RBC Capital Markets Corp., BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, BofA Merrill Lynch and Mizuho Securities USA Inc. were the bookrunners for the notes due 2024.
Citigroup, JPMorgan, BofA Merrill Lynch, Barclays, BNP Paribas, Credit Suisse, Mizuho Securities and RBC were the lead managers for the add-on.
The notes are guaranteed by Discovery Communications, Inc.
Proceeds will be used for a tender offer for up to $600 million of debt securities and for general corporate purposes, including repaying or refinancing debt.
The global media company is based in Silver Spring, Md.
| Issuer: | Discovery Communications, LLC
|
| Guarantor: | Discovery Communications, Inc.
|
| Amount: | $650 million
|
| Description: | Senior notes
|
| Trade date: | Feb. 28
|
| Settlement date: | March 13
|
| Ratings: | Moody’s: Baa3
|
| S&P: BBB-
|
| Fitch: BBB-
|
| Distribution: | SEC registered
|
|
|
| Seven-year notes
|
| Amount: | $450 million
|
| Maturity: | March 13, 2024
|
| Bookrunners: | Barclays, Citigroup Global Markets Inc., RBC Capital Markets Corp., BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, BofA Merrill Lynch and Mizuho Securities USA Inc.
|
| Co-managers: | Goldman Sachs & Co., Morgan Stanley & Co. LLC, MUFG, Scotia Capital (USA) Inc., SunTrust Robinson Humphrey, Inc. and Wells Fargo Securities, LLC
|
| Coupon: | 3.8%
|
| Price: | 99.811
|
| Yield: | 3.831%
|
| Spread: | Treasuries plus 165 bps
|
| Price guidance: | Treasuries plus 170 bps area, plus or minus 5 bps
|
| Call feature: | Make-whole call before Jan. 13, 2024 at Treasuries plus 25 bps; thereafter at par
|
|
|
| Reopening of 2026 notes
|
| Amount: | $200 million reopening
|
| Maturity: | March 11, 2026
|
| Bookrunners: | Citigroup, JPMorgan, BofA Merrill Lynch, Barclays, BNP Paribas, Credit Suisse, Mizuho Securities and RBC Capital Markets Corp.
|
| Co-managers: | Goldman Sachs, Morgan Stanley, MUFG, Scotia Capital, SunTrust Robinson Humphrey and Wells Fargo
|
| Coupon: | 4.9%
|
| Price: | 105.038
|
| Yield: | 4.206%
|
| Spread: | Treasuries plus 185 bps
|
| Price guidance: | Treasuries plus 190 bps area, plus or minus 5 bps
|
| Call feature: | Make-whole call before Dec. 11, 2025 at Treasuries plus 50 bps; thereafter at par
|
| Total outstanding: | $700 million, including $500 million priced on March 8, 2016 at 312.5 bps over Treasuries
|
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