Discovery prices tender, exchange offers for $4.7 billion of notes

By Sarah Lizee

Olympia, Wash., Sept. 16 – Discovery, Inc. announced pricing of its any-and-all tender offers and separate exchange offers for five series of outstanding senior notes totaling $4.7 billion issued by Discovery Communications, LLC, according to two press releases.

As previously reported, the offers will expire at 5 p.m. ET on Sept. 16. Settlement is expected for Sept. 21.

Tenders under both the cash offers and exchange offers may be withdrawn at or prior to the expiration time.

The following notes are included in the offers, listed in order of acceptance priority level:

• $1.25 billion 5% senior notes due 2037 (Cusip: 25470DAS8) with pricing set using the 1.25% Treasury due May 15, 2050 plus 190 basis points for a total consideration of $1,211.66 per $1,000 of notes;

• $850 million 6.35% senior notes due 2040 (Cusip: 25470DAD1) with pricing set using the 1.25% Treasury due May 15, 2050 plus 225 bps for a total consideration of $1,372.87 per $1,000 of notes;

• $1.25 billion 5.2% senior notes due 2047 (Cusip: 25470DAT6) with pricing set using the 1.25% Treasury due May 15, 2050 plus 235 bps for a total consideration of $1,237.74 per $1,000 of notes;

• $500 million 4.95% senior notes due 2042 (Cusip: 25470DAG4) with pricing set using the 1.25% Treasury due May 15, 2050 plus 230 bps for a total consideration of $1,181.23 per $1,000 of notes; and

• $850 million 4.875% senior notes due 2043 (Cusip: 25470DAJ8) with pricing set using the 1.25% Treasury due May 15, 2050 plus 230 bps for a total consideration of $1,174.62 per $1,000 of notes.

Holders will also receive accrued interest.

Under the exchange offer, Discovery plans to issue up to $2.1 billion of senior notes due 2055, with pricing set using the 1.25% Treasury due May 15, 2050 plus 260 bps for an interest rate of 4%, a yield of 4.023% and a new issue price of $995.71.

The principal amount of new notes to be issued for each $1,000 of notes in each series under the exchange offer is $1,216.88 for the 2037 notes, $1,378.79 for the 2040 notes, $1,243.07 for the 2047 notes, $1,186.32 for the 2042 notes and $1,179.68 for the 2043 notes.

The information agent, tender agent and exchange agent is D.F. King & Co., Inc. (800 431-9646, 212 269-5550, disca@dfking.com).

Deutsche Bank Securities Inc. (212 250-2955, 866 627-0391) and RBC Capital Markets, LLC (212 618-7843, 877 381-2099) are acting as the joint lead dealer managers for the tender offer.

The exchange offers are subject to some conditions, including that the aggregate principal amount of cash payable by the offerors to holders participating in the cash offers is no greater than $80 million before giving effect to the accrued coupon payment, that the bid-side yield on the applicable treasury security is not more than 2% for each series of old notes on the applicable exchange offer settlement date, and a minimum of $500 of new notes be issued in the exchange.

Only qualified institutional buyers are eligible to participate in the exchange offers, while only retail investors are eligible to participate in the tender offers.

The global media company is based in Silver Spring, Md.

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