AT&T Inc and Discovery Communications (NYSE:DISCA) Inc have raised US$30bn (£23bn) for their media joint-venture via the sale of corporate bonds, in one of largest-ever corporate debt sales.
The deal received US$106bn in orders from investors in a sign of renewed confidence in company debt following a bout of nervousness brought about by Russia's invasion of Ukraine.
The pair sold its bonds in 11 tranches, with the longest duration being a 40-year security yielding 3.05 percentage points more than US treasuries, following earlier discussions around a 3.25% yield, a source told Bloomberg.
It is the joint-fourth largest bond offering in history, and the biggest since AbbVie’s 2019 bond offering of US$30bn, while the US$106bn of buying interest was the highest level since CVS sold bonds in 2018.
The pairs’s debt offering is rated BBB by S&P Global Ratings and Baa3 by Moody’ Investors Service, both one level above junk.
Last May CNN, HBO and Warner Bros. studio owner AT&T announced they would merge with Discovery in a US$43bn deal. Debt for the combined entity is thought to be around US$55bn.
Shares in Discovery were down 1.15% at US$25.72 yesterday in after-hours trading, while AT&T was up 1.13% at US$23.36.