ViacomCBS on Friday said that it has raised $2.5 billion after agreeing to sell two separate debt notes, both with a total value of $1.25 billion each.
The move follows similar ones made by Comcast earlier this week, which raised $4 billion in its debt offering, and Disney last week, which raised $6 billion. On Tuesday, Discovery also revealed that it borrowed $500 million earlier this month in credit.
ViacomCBS didn’t offer any specifics on what the funds would be used for but did say that it would go toward “general corporate purposes, which may include repayment of outstanding indebtedness,” or paying down debt the company currently has.
ViacomCBS is selling $1.25 billion in aggregate principal amount of 4.75% senior notes which will be due 2025 at a price equal to 99.498% of the principal amount, and $1.25 billion in aggregate principal amount of 4.95% senior notes due 2031 at a price equal to 98.036% of the principal amount.
ViacomCBS’ senior unsecured debt is currently rated BBB (stable) by Fitch Ratings, Baa2 (stable) by Moody’s Investors Service and BBB (negative) by S&P Global Ratings.
The company said it expects the sale of the senior notes to close on April 1.
The spread of the novel coronavirus throughout the U.S. and much of the world has posed a tough financial hurdle for ViacomCBS and much of Hollywood. The pandemic has forced movie theaters to close, films to be pushed, productions put on hold and offices to be closed, and it has thrust much of the industry into financial straits.
ViacomCBS also withdrew its 2020 financial guidance on Friday as a result of the pandemic, and said it was working to offset expected revenue losses through cost-saving initiatives.
“The impact of COVID-19 on ViacomCBS’ businesses – including the postponement of theatrical releases domestically and internationally, cancellation or rescheduling of sports events for which the company had broadcast rights, and production delays in television and filmed entertainment programming – could be material to the company’s operating results, cash flows and financial position,” ViacomCBS management wrote in a release. “The magnitude of the impacts will depend on the duration and extent of the COVID-19 pandemic and the impact of federal, state, local and foreign governmental actions and consumer behavior in response to the pandemic and such governmental actions.
“Due to the evolving and uncertain nature of this situation, we are not able to estimate the full extent of the negative impact on ViacomCBS’ operating results, cash flows and financial position – including advertising and filmed entertainment revenues – particularly over the near to medium term,” the release continued.
President Donald Trump on Friday signed into law the unprecedented $2 trillion economic relief package designed to address the fallout from the ongoing coronavirus pandemic.
Unlike other industries, such as the airline industry, Hollywood hasn’t exactly been singled out to receive a specific bailout. Many of Hollywood’s bigger businesses, however, could still apply for loans through the $500 billion lending program, while the smaller businesses — which could include many movie theaters — could request aid from the $350 billion small business loan program to help cover payroll costs.
Read original story ViacomCBS Raises $2.5 Billion in New Debt Offering At TheWrap