Discovery Raises $1.5 Billion in New Debt Amid Pandemic

President and CEO, Discovery, Inc. David Zaslav - Getty - H 2020
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Discovery CEO David Zaslav

The cable giant, led by CEO David Zaslav, joins other Hollywood players, including Walt Disney and Comcast, who have turned to the debt market.

Discovery is raising $1.5 billion in new debt through a public offering, in part to repay or refinance other debt, according to a SEC filing made public Thursday.

The new debt raise includes $640 million in senior notes at 4.375 percent interest, due 2021, another $496 million in senior notes at 3.3 percent interest and due 2022, and $345 million in senior notes at 3.5 percent interest, and due 2022.

Discovery said the proceeds from the public offer would be used for general corporate purposes, including the repayment and refinancing of other debt. The new bond offering comes as Discovery faces a TV ad downturn as brands cut their spending during the coronavirus outbreak.

Those headwinds were reflected Wednesday when Discovery reported first-quarter earnings and told analysts U.S. TV advertising was down 20 percent in April, with international down 40 percent for the month.

The company also said Wednesday that it had moved to "ensure sufficient liquidity and flexibility in light of the current uncertainty surrounding the impact of COVID-19."

Discovery joins other Hollywood players who have turned to the debt market. Comcast earlier raised $4 billion through a debt offering to offset the impact of the COVID-19 outbreak on its businesses, and The Walt Disney Company raised another $6 billion via its own new debt offering.