Viacom has announced it will sell $1.3 billion in debt – $400 million in aggregate principal amount of 2.250% senior notes due in 2022 at a price equal to 99.692% of the principle amount, and $900 million in aggregate principal amount of 3.450% senior notes due in 2026 at a price equal to 99.481%. Subject to customary closing conditions, the sale of these Senior Notes is expected to close October 4.
Viacom entered the debt market a week after receiving Moody’s lowest investment grade rating, Baa3, just one step above what is considered speculative, or “junk” status. That makes it barely acceptable for investment by pension funds, colleges and others entities restricted to investment-grade vehicles. Viacom’s senior unsecured debt is also rated BBB- (negative) by S&P Global Ratings, and BBB (negative) by by Fitch Ratings.
The net proceeds from today’s offering will be primarily used for the repayment of outstanding debts, including $400 million aggregate principal amount of its 2.500% senior notes due December 2016, $500 million aggregate principal amount of its 3.500% senior notes due April 2017, borrowings under its commercial paper program, and for general corporate purposes if any proceeds remain after repayment.
Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC are serving as joint book-running managers for the offering.
