ViacomCBS Raises $2 Billion in New Debt

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ViacomCBS CEO Bob Bakish (center), flanked (from left) by Phil Simms, Trevor Noah, Shari Redstone, Stephen Colbert and Gayle King

The studio is raising fresh cash to complete a $2 billion cash tender offer to purchase near-term corporate debt set to mature as it navigates the new coronavirus pandemic.

ViacomCBS on Tuesday announced a new debt offering to raise $2 billion.

The move follows the studio earlier in the day launching a cash tender offer for up to $2 billion to purchase outstanding debt securities. ViacomCBS, led by CEO Bob Bakish, is the latest entertainment industry company to restructure its debt load amid the fallout from the coronavirus crisis.

ViacomCBS after the market close said it had sold $1 billion in senior notes at 4.2 percent interest and due 2032, along with another sale of $1 billion in senior notes at 4.95 percent and due 2050 via the debt offering.

The studio said it ended to use the proceeds from its latest debt offer towards the cash tender offer begun Tuesday to purchase $2 billion in debt originally issued by CBS and CBS Broadcasting, both predecessors of the newly combined ViacomCBS entity.

The near-term senior notes are due from 2021 to 2023, and the tender offer also targeted the 5.875 percent of junior subordinated debentures, due in 2057 and capped at $130 million in total redemptions.

A cash tender offer represents a public offer to purchase all or some outstanding debt securities to better manage a company's liabilities. ViacomCBS in earlier announcements said it has used the net proceeds from new debt offerings "for general corporate purposes, which may include repayment of outstanding indebtedness."

The studio on April 14 said it redeemed $800 million in senior secured notes that mature in 2021. In an April 27 statement, it said the new coronavirus pandemic could have a "material" impact on its future financial results, withdrew its 2020 financial guidance and said it was planning "cost savings initiatives" to offset some of the expected revenue losses.

May 12, 4 p.m. Updated with the announcement of a $2 billion debt offering by ViacomCBS.