ViacomCBS Announces $2 Billion Debt Offering (Updated)

Offering comes on the same day ViacomCBS said it would be purchasing $2 billion in debt

Last Updated: May 12, 2020 @ 3:57 PM

Updated on Tuesday, May 12 at 3:40 p.m. PT: ViacomCBS on Tuesday afternoon added to what had already been a busy day for the entertainment giant by announcing a $2 billion debt offering. The company has “agreed to sell $1.0 billion in aggregate principal amount of 4.200% senior notes due 2032 at a price equal to 97.395% of the principal amount thereof… and $1.0 billion in aggregate principal amount of 4.950% senior notes due 2050 at a price equal to 94.987% of the principal amount thereof,” according to a filing. In other words: ViacomCBS decided to refinance $2 billion in debt at lower interest rates.

The move come after ViacomCBS shared plans to purchase up to $2 billion of company debt, according to a second Securities and Exchange Commission (SEC) filing on Tuesday afternoon. Earlier in the day, ViacomCBS said via an initial SEC filing that it would buy back up to $1 billion in debt.

The debt is CBS’ and it predates the recombination of the two major media companies, a merger made official in December 2019.

TheWrap asked a company spokesperson why the already-large dollar amount doubled over the course of hours, but we did not immediately receive a response.

Such a move to retire outstanding debt provides a company some financial flexibility as media revenues have been battered by the ongoing coronavirus pandemic. It comes after ViacomCBS raised $2.5 billion in a debt offering in late March. 

While ViacomCBS CEO Bob Bakish said last week the company is in “excellent shape from a liquidity perspective” on its quarterly earnings call, Tuesday’s filing showed the company is continuing to look to take advantage of low interest rates. The company’s near-term senior notes, Tuesday’s filing said, will be due between 2021 and 2023.

The announcement also comes as the entertainment giant looks to expand on its current streaming services.

Last week, Bakish said ViacomCBS is looking to make “major changes” to its CBS All Access streaming service, preparing a full summer rebrand and relaunch under a new name. The revamped service, according to Bakish, will include an expanded slate of ViacomCBS programming, including content from Nickelodeon, Comedy Central, Smithsonian, MTV, BET and Paramount. “Our biggest franchises will be key to this strategy,” Bakish said.

CBS All Access and Showtime’s streaming services have 13.5 million monthly subscribers between them, ViacomCBS said last week. Free streaming service PlutoTV, meanwhile, which ViacomCBS purchased last year for $340 million, now has 24 million active users.

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