BSkyB successfully prices bonds ahead of Sky Europe acquisition

UK pay TV operator BSkyB has successfully priced a £3.25 billion (€4 billion) series of bonds to help finance its acquisition of Sky Italia and a majority stake in Sky Deutschland from 21^st Century Fox. 

The bonds will be issued in four tranches, with a €1.5 billion bond with a 1.5% coupon due in 2021, a €1 billion bond with a coupon of 2.5% due in 2026, a US$750 million (€580 million) bond with a coupon of 2.625% due in 2019 and a US$1.25 billion bond with a coupon of 3.75% due in 2024.

As a result of the transactions, BSkyB’s gross debt will increase by a further £3.25 billion from its June base of £2.589 billion.

Proceeds of the US dollar bonds will be swapped into euros, resulting in a cost to Sky of approximately 1.3% for the bonds due in 2019 and 2.4% for the bonds due in 2024.