SILVER SPRING, Md.,
Sept. 16, 2020 /PRNewswire/
-- Discovery, Inc. ("Discovery") (Nasdaq: DISCA, DISCB, DISCK)
today announced the pricing terms of its previously announced
transaction to exchange five series of outstanding senior notes
issued by its wholly owned subsidiary, Discovery Communications,
LLC ("DCL"). The exchange transaction consists of five separate
private offers to exchange by Discovery, DCL and Discovery's
indirect wholly owned subsidiary Scripps Networks Interactive, Inc.
("Scripps" and together with DCL and Discovery, the "Offerors")
(each, an "Exchange Offer," and collectively, the "Exchange
Offers") any and all of the outstanding notes listed in the table
below (collectively, the "Old Notes") for one new series of senior
notes due 2055 to be issued by DCL (the "New Notes"), on the terms
and subject to conditions set forth in the Offering Memorandum
dated September 10, 2020 (the
"Offering Memorandum" and, together with the eligibility letter,
the Canadian holder form and the notice of guaranteed delivery, the
"Exchange Offer Documents"). No consents are being solicited as
part of the Exchange Offers.
The Offerors' obligation to complete an Exchange Offer with
respect to a particular series of Old Notes is conditioned (the
"Maximum Consideration Condition") on the aggregate Total Exchange
Consideration (as defined below) for the Exchange Offers (which
excludes the applicable Accrued Coupon Payment (as defined below))
not exceeding $2,100,000,000
("Maximum New Notes Amount") and is subject to the other conditions
set forth below.
The Exchange Offers will expire at 5:00
p.m., New York City time
today, September 16, 2020, unless
extended or earlier terminated by the Offerors (the "Exchange Offer
Expiration Date"). The "Exchange Offer Settlement Date" will be
promptly following the Exchange Offer Expiration Date and is
expected to be September 21,
2020.
Only holders who are "qualified institutional buyers" or who are
non-U.S. persons (other than "retail investors" in the European
Economic Area or in the United
Kingdom and investors in any province or territory of
Canada that are individuals or
that are institutions or other entities that do not qualify as both
"accredited investors" and "permitted clients") are eligible to
participate in this transaction, as more fully described below.
Discovery also announced today the pricing terms of its transaction
to purchase any and all of the same five series of notes pursuant
to cash tender offers (each, a "Cash Offer" and collectively, the
"Cash Offers"), which are open only to Ineligible Holders (as
defined below).
The following table sets forth, for each series of Old Notes,
the yields, the Exchange Consideration (as defined in the Exchange
Offer Documents) and the principal amount of New Notes to be issued
(the "Total Exchange Consideration") for each $1,000 principal amount of such Old Notes validly
tendered and not validly withdrawn prior to the Exchange Offer
Expiration Date and accepted by the Offerors:
Title of Series
of
Old Notes to be
Exchanged
|
CUSIP Number /
ISIN
|
Acceptance
Priority
Level(1)
|
Reference U.S.
Treasury
Security
|
Reference
Yield(2)
|
Fixed
Spread (basis
points)
|
Yield(3)
|
Exchange
Consideration
|
Principal
Amount
of New Notes to be
Issued(4)
|
5.000% Senior Notes
due 2037
("2037
Notes")
|
25470D AS8
US25470DAS80
|
1
|
1.25% due May 15,
2050
|
1.423%
|
190
|
3.323%
|
$1,211.66
|
$1,216.88
|
6.350% Senior Notes
due 2040
("2040
Notes")
|
25470DAD1
US25470DAD12
|
2
|
1.25% due May 15,
2050
|
1.423%
|
225
|
3.673%
|
$1,372.87
|
$1,378.79
|
5.200% Senior Notes
due 2047
("2047
Notes")
|
25470D AT6
US25470DAT63
|
3
|
1.25% due May 15,
2050
|
1.423%
|
235
|
3.773%
|
$1,237.74
|
$1,243.07
|
4.950% Senior Notes
due 2042
("2042
Notes")
|
25470D AG4
US25470DAG43
|
4
|
1.25% due May 15,
2050
|
1.423%
|
230
|
3.723%
|
$1,181.23
|
$1,186.32
|
4.875% Senior Notes
due 2043
("2043
Notes")
|
25470D AJ8
US25470DAJ81
|
5
|
1.25% due May 15,
2050
|
1.423%
|
230
|
3.723%
|
$1,174.62
|
$1,179.68
|
|
|
|
|
|
|
|
|
|
(1)
|
The Offerors will
accept Old Notes for exchange in the order of their respective
Acceptance Priority Level specified in the table above (each, an
"Acceptance Priority Level," with 1 being the highest Acceptance
Priority Level and 5 being the lowest Acceptance Priority Level),
subject to the Maximum Consideration Condition and the other terms
and conditions described in the Offering Memorandum. It is possible
that the Maximum Consideration Condition might not be met with
respect to a series of Old Notes and such series of Old Notes will
not be accepted for exchange, even if one or more series of Old
Notes with a lower Acceptance Priority Level is accepted for
exchange.
|
|
|
(2)
|
Represents the
bid-side yield on the Reference U.S. Treasury Security calculated
as of the Pricing Time (as defined below) in accordance with the
procedures set forth in the Offering Memorandum.
|
|
|
(3)
|
Represents the
bid-side yield on the Reference U.S. Treasury Security plus the
applicable Fixed Spread, calculated in accordance with the
procedures set forth in the Offering Memorandum.
|
|
|
(4)
|
Determined taking
into account the par call date, where applicable, for such series
of Old Notes.
|
The New Notes will have an interest rate of 4.000%, a yield of
4.023% and a New Issue Price (as defined in the Offering
Memorandum) of $995.71, which has
been determined by reference to the bid-side yield on the 1.25%
U.S. Treasury Notes due May 15, 2050,
as of 11:00 a.m., New York City time today, September 16, 2020 (such date and time, the
"Pricing Time"), which was 1.423%.
The Offerors will deliver New Notes in exchange for Old Notes
accepted for exchange in the Exchange Offers on the Exchange Offer
Settlement Date.
Upon the terms and subject to the conditions set forth in the
Exchange Offer Documents, Eligible Holders (as defined below) who
(i) validly tender and who do not validly withdraw Old Notes at or
prior to the Exchange Offer Expiration Date or (ii) deliver a
properly completed and duly executed notice of guaranteed delivery
and all other required documents at or prior to the applicable
Exchange Offer Expiration Date and tender their Old Notes at or
prior to 5:00 p.m., New York City time, on the second business day
after the applicable Exchange Offer Expiration Date pursuant to
guaranteed delivery procedures, expected to be September 18, 2020, subject in each case to
tendering the applicable minimum denominations, and whose Old Notes
are accepted for exchange by the Offerors, will receive
consideration in the Exchange Offers equal to the applicable Total
Exchange Consideration.
In addition to the applicable Total Exchange Consideration, the
Offerors also intend to pay in cash accrued and unpaid interest on
the Old Notes accepted for exchange from the last applicable
interest payment date to, but excluding, the Exchange Offer
Settlement Date (the "Accrued Coupon Payment") and amounts due in
lieu of fractional amounts of New Notes. Interest will cease to
accrue on the Exchange Offer Settlement Date for all Old Notes
accepted in the Exchange Offers, including those tendered pursuant
to the Guaranteed Delivery Procedures. The last interest payment
dates for the Old Notes are expected to be September 20, 2020 for the 2037 Notes and the
2047 Notes, June 1, 2020 for the 2040
Notes, May 15, 2020 for the 2042
Notes and April 1, 2020 for the 2043
Notes. For the avoidance of doubt, the interest payment payable
with respect to the September 20,
2020 interest payment for the 2037 Notes and the 2047 Notes
will be paid to record holders of the 2037 Notes and 2047 Notes as
of September 5, 2020 and thus will
not be included in the calculation of the Accrued Coupon Payment
payable on the 2037 Notes or the 2047 Notes.
The complete terms and conditions of the Exchange Offers are
forth in the Exchange Offer Documents, each of which have been
distributed to Eligible Holders in connection with the proposed
Exchange Offers. Each Exchange Offer is subject to certain
conditions, including (i) certain customary conditions, including
that the Offerors will not be obligated to consummate the Exchange
Offers upon the occurrence of an event or events or the likely
occurrence of an event or events that would or might reasonably be
expected to prohibit, restrict or delay the consummation of the
Exchange Offers or materially impair the contemplated benefits to
us of the Exchange Offers, (ii) the Maximum Consideration
Condition, (iii) the timely satisfaction or waiver of all of the
conditions precedent to the completion of the corresponding Cash
Offers for such series of Old Notes (with respect to each Cash
Offer, the "Cash Offer Completion Condition"), (iv) that the
aggregate principal amount of cash payable by the Offerors to
Ineligible Holders participating in the Cash Offers is no greater
than $80 million before giving effect
to the Accrued Coupon Payment (the "Aggregate Maximum Cash Offer
Condition"), (v) that the bid-side yield on the applicable
Reference U.S. Treasury Security (as set forth in the table above
for the Old Notes) is not more than 2.00% for each series of Old
Notes on the applicable Exchange Offer Settlement Date and (vi) a
minimum of $500 million aggregate
principal amount of New Notes be issued in exchange for Old Notes
validly tendered and not validly withdrawn.
The Offerors will terminate an Exchange Offer for a given series
of Old Notes if they terminate the Cash Offer for such series of
Old Notes, and the Offerors will terminate the Cash Offer for a
given series of Old Notes if they terminate the Exchange Offer for
such series of Old Notes. The Cash Offer Completion Condition may
not be waived by the Offerors; however, the Offerors reserve the
right, in their sole discretion, to waive the other conditions.
If the conditions precedent to the Exchange Offers are not
satisfied or waived for every series of Old Notes because the
Maximum Consideration Condition is not satisfied or waived, then
the Offerors will, in accordance with the Acceptance Priority
Levels, accept for exchange all Old Notes of each series validly
tendered and not validly withdrawn, so long as (1) the aggregate
Total Exchange Consideration necessary to exchange all validly
tendered and not validly withdrawn Old Notes of such series, plus
(2) the aggregate Total Exchange Consideration necessary to
exchange all validly tendered and not validly withdrawn Old Notes
of all series having a higher Acceptance Priority Level than such
series of Old Notes is equal to, or less than the Maximum New Notes
Amount, subject to the condition with respect to Non-Covered Notes
further described in the Offering Memorandum.
It is possible that a series of Old Notes with a particular
Acceptance Priority Level will fail to meet the Maximum
Consideration Condition or another condition set forth in the
Offering Memorandum and therefore will not be accepted for exchange
even if one or more series with a lower Acceptance Priority Level
is accepted for exchange. If any series of Old Notes is accepted
for exchange under the Exchange Offers, all Old Notes of that
series that are validly tendered and not validly withdrawn will be
accepted for exchange
The Exchange Offers and the issuance of the New Notes have not
been registered under the U.S. Securities Act of 1933, as amended
(the "Securities Act"), under any other federal, state or other law
pertaining to the registration of securities, or with any
securities regulatory authority of any State or other jurisdiction.
The New Notes may not be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements of the
Securities Act and any applicable state securities laws.
The Exchange Offers are only made, the New Notes are only being
offered and will only be issued, and copies of the Offering
Memorandum have only been made available, to a holder of Old Notes
who has certified its status as either (a) a "qualified
institutional buyer" as defined in Rule 144A under the Securities
Act of 1933, as amended (the "Securities Act") or (b) (i) a person
who is not a "U.S. person" as defined under Regulation S under the
Securities Act, or a dealer or other professional fiduciary
organized, incorporated or (if an individual) residing in
the United States holding a
discretionary account or similar account (other than an estate or
trust) for the benefit or account of a non-"U.S. person," (ii) if
located or resident in the European Economic Area or the
United Kingdom, a person other
than a "retail investor" (for these purposes, a retail investor
means a person who is one (or more) of: (x) a retail client as
defined in point (11) of Article 4(1) of Directive 2014/65/EU (as
amended, "MiFID II"); or (y) a customer within the meaning of
Directive 2002/92/EC (as amended, the "Insurance Mediation
Directive"), where that customer would not qualify as a
professional client as defined in point (10) of Article 4(1) of
MiFID II; or (z) not a qualified investor as defined in Regulation
(EU) 2017/1129 (as amended, the "Prospectus Regulation")) and (iii)
if located or resident in Canada,
an "accredited investor" as such term is defined in National
Instrument 45-106 – Prospectus Exemptions ("NI 45-106"), and, if
located or resident in Ontario, as
such term is defined in section 73.3(1) of the Securities Act
(Ontario), and in each case, is
not an individual, and such "accredited investor" is also a
"permitted client," as such term is defined in National Instrument
31-103 - Registration Requirements, Exemptions and Ongoing
Registrant Obligations ("NI 31-103") ("Canadian Eligible Holders").
The Offerors refer to holders of Old Notes who certify to the
Offerors that they are eligible to participate in the Exchange
Offers pursuant to at least one of the foregoing conditions as
"Eligible Holders."
The Offerors refers to holders of Old Notes who are not Eligible
Holders as "Ineligible Holders."
Only Eligible Holders who have confirmed they are Eligible
Holders via the eligibility letter are authorized to receive or
review the Exchange Offer Documents or to participate in the
Exchange Offers. For Canadian Eligible Holders, such participation
is also conditioned upon the receipt of the Canadian beneficial
holder form. There is no separate letter of transmittal in
connection with the Offering Memorandum.
Holders are advised to check with any bank, securities broker or
other intermediary through which they hold Old Notes as to when
such intermediary needs to receive instructions from a holder in
order for that holder to be able to participate in, or (in the
circumstances in which revocation is permitted) revoke their
instruction to participate in the Exchange Offers before the
deadlines specified herein and in the Exchange Offer Documents. The
deadlines set by each clearing system for the submission and
withdrawal of exchange instructions will also be earlier than the
relevant deadlines specified herein and in the Exchange Offer
Documents.
D.F. King & Co., Inc. is acting as the exchange agent and
information agent for the Old Notes in the Exchange Offers.
Documents relating to the Exchange Offers will only be distributed
to holders of Old Notes who certify that they are Eligible Holders.
Questions or requests for assistance related to the Exchange Offers
or for additional copies of the Exchange Offer Documents may be
directed to D.F. King & Co., Inc. (800) 431-9646 (U.S.
toll-free) or (212) 269-5550 (banks and brokers), via email at
disca@dfking.com or online at www.dfking.com/discovery. You may
also contact your broker, dealer, commercial bank, trust company or
other nominee for assistance concerning the Exchange Offers.
The Exchange Offer Documents can be accessed at the following
link: www.dfking.com/discovery.
This press release is not an offer to sell or a solicitation of
an offer to buy any of the securities described herein. The
Exchange Offers are being made solely by the Exchange Offer
Documents and only to such persons and in such jurisdictions as is
permitted under applicable law.
About Discovery
Discovery is a global leader in real life entertainment, serving
a passionate audience of superfans around the world with content
that inspires, informs and entertains. Discovery delivers over
8,000 hours of original programming each year and has category
leadership across deeply loved content genres around the world.
Available in 220 countries and territories and in nearly 50
languages, Discovery is a platform innovator, reaching viewers on
all screens, including TV Everywhere products such as the GO
portfolio of apps; direct-to-consumer streaming services such as
Eurosport Player, Food Network Kitchen and MotorTrend OnDemand;
digital-first and social content from Group Nine Media; a landmark
natural history and factual content partnership with the BBC; and a
strategic alliance with PGA TOUR to create the international home
of golf. Discovery's portfolio of premium brands includes Discovery
Channel, HGTV, Food Network, TLC, Investigation Discovery, Travel
Channel, MotorTrend, Animal Planet, Science Channel, and the
forthcoming multi-platform JV with Chip and
Joanna Gaines, Magnolia, as well as OWN: Oprah Winfrey
Network in the U.S., Discovery Kids in Latin America, and Eurosport, the leading
provider of locally relevant, premium sports and Home of the
Olympic Games across Europe.
Cautionary Statement Concerning Forward-looking
Statements
This press release contains certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements are based on current
expectations, forecasts and assumptions that involve risks and
uncertainties and on information available to Discovery as of the
date hereof. Discovery's actual results could differ materially
from those stated or implied, due to risks and uncertainties
associated with its business, which include the risks related to
the acceptance of any tendered Old Notes, the expiration and
settlement of the Exchanges Offers, the satisfaction of conditions
to the Exchange Offers, whether the Exchange Offers will be
consummated in accordance with the terms set forth in the Offering
Memorandum or at all and the timing of any of the foregoing, as
well as the risk factors disclosed in its Annual Report on Form
10-K filed with the SEC on February 27,
2020 and in Discovery's Quarterly Reports on Form 10-Q filed
with the SEC on May 6, 2020 and
August 5, 2020. Forward-looking
statements in this release include, without limitation, statements
regarding Discovery's expectations, beliefs, intentions or
strategies regarding the future, and can be identified by
forward-looking words such as "anticipate," "believe," "could,"
"continue," "estimate," "expect," "intend," "may," "should," "will"
and "would" or similar words. Discovery expressly disclaims any
obligation or undertaking to disseminate any updates or revisions
to any forward-looking statement contained herein to reflect any
change in Discovery's expectations with regard thereto or any
change in events, conditions or circumstances on which any such
statement is based.
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SOURCE Discovery, Inc.