News Corporation (NASDAQ: NWS) managed to do something rather impressive considering the state of the media in the aftermath of the recession. Rupert Murdoch and friends raised close to $2.5 billion today via long-term senior note sales. What makes the offering even more impressive than anything is that one of the debt traunches is 10-year debt and one is a 30-year corporate debt.
The debt was sold as a 144A or private placement under the News America Incorporated unit. One issue was $1 billion of 4.50% senior notes due in 2021 fr a 10-year maturity. The second traunch was the 30-year maturity listed as $1.5 billion of 6.15% senior notes due in 2041.
The gross proceeds of $2,486,075,000 are earmarked for general corporate purposes, which includes the refinancing of near-term debt maturities. The company noted that its total assets as of December 31, 2010 were approximately $57 billion and total annual revenues of approximately US$33 billion.
Clearly, the cash was not needed. We have not seen the formal pricing on the deal yet, but the spreads appear to be about 85 basis points over the 10-year Treasury and about 145 basis points over the 30-year Treasury. Impressive enough.
JON C. OGG