Item 1.01 Entry into a Material Definitive Agreement.
On May 18, 2020, Discovery Communications, LLC ("DCL"), a wholly-owned
subsidiary of Discovery, Inc. ("Discovery"), completed its registered offering
of $1 billion aggregate principal amount of its 3.625% Senior Notes due 2030
(the "2030 Notes") and $1 billion aggregate principal amount of its 4.650%
Senior Notes due 2050 (the "2050 Notes" and, together with the 2030 Notes, the
"Notes"). The offering of the Notes was made pursuant to DCL's shelf
registration statement on Form S-3 (File No. 333-231160) filed with the
Securities and Exchange Commission on May 1, 2019 (the "Registration
Statement").
The Notes were sold in an underwritten public offering pursuant to an
underwriting agreement, dated as of May 7, 2020, among DCL, Discovery, Scripps
Networks Interactive, Inc. ("Scripps"), a wholly-owned subsidiary of Discovery,
and BofA Securities, Inc., Citigroup Global Markets Inc., Credit Suisse
Securities (USA) LLC and Goldman Sachs & Co. LLC, as the representatives of the
several underwriters named therein.
The Notes were issued pursuant to an indenture, dated as of August 19, 2009,
among DCL, Discovery and U.S. Bank National Association, as trustee (the "base
indenture"), as supplemented by an eighteenth supplemental indenture, dated as
of May 18, 2020, among DCL, Discovery, Scripps and U.S. Bank National
Association, as trustee. The base indenture and the eighteenth supplemental
indenture contain certain covenants, events of default and other customary
provisions.
The 2030 Notes bear interest at a rate of 3.625% per year and will mature on
May 15, 2030. The 2050 Notes bear interest at a rate of 4.650% per year and will
mature on May 15, 2050. Interest on the 2030 Notes and the 2050 Notes is payable
on May 15 and November 15 of each year, beginning on November 15, 2020.
Prior to February 15, 2030, DCL may, at its option, redeem some or all of the
2030 Notes at any time and from time to time by paying a make-whole premium,
plus accrued and unpaid interest, if any, to the date of redemption. On and
after February 15, 2030, DCL may, at its option, redeem some or all of the 2030
Notes at any time and from time to time, at a redemption price equal to 100% of
the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid
interest, if any, to the date of redemption. Prior to November 15, 2049, DCL
may, at its option, redeem some or all of the 2050 Notes at any time and from
time to time by paying a make-whole premium, plus accrued and unpaid interest,
if any, to the date of redemption. On and after November 15, 2049, DCL may, at
its option, redeem some or all of the 2050 Notes at any time or from time to
time, at a redemption price equal to 100% of the principal amount of the 2050
Notes to be redeemed, plus accrued and unpaid interest, if any, to the date of
redemption.
The Notes are unsecured and rank equally in right of payment with all of DCL's
other unsecured senior indebtedness. The Notes are fully and unconditionally
guaranteed on an unsecured and unsubordinated basis by Discovery and Scripps.
DCL expects that the net proceeds from the sale of the Notes will be
approximately $1.979 billion after deducting the underwriting discounts and its
estimated expenses related to the offering.
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Discovery intends to use the net proceeds from the offering to fund the
previously announced tender offers for several series of outstanding notes
issued by DCL and Scripps and to pay accrued and unpaid interest, premiums, fees
and expenses in connection with those tender offers. Discovery intends to use
any remaining proceeds for general corporate purposes, which may include without
limitation, repayment and refinancing of debt, working capital and capital
expenditures.
Description of Notes, Base Indenture and Supplemental Indenture
The foregoing descriptions of the Notes, the base indenture and the eighteenth
supplemental indenture are summaries only and are qualified in their entirety by
reference to the full text of such documents. The base indenture, which was
filed as Exhibit 4.1 to Discovery's Current Report on Form 8-K on August 19,
2009, was included as Exhibit 4.9 to the Registration Statement, and the
eighteenth supplemental indenture, which is filed as Exhibit 4.1 hereto, is
incorporated by reference into the Registration Statement.
Opinions regarding the legality of the Notes and the guarantees thereof are
incorporated by reference into the Registration Statement and are filed as
Exhibits 5.1 and 5.2 hereto, and consents relating to the incorporation of such
opinions are incorporated by reference into the Registration Statement and are
filed as Exhibits 23.1 and 23.2 hereto by reference to their inclusion within
Exhibits 5.1 and 5.2, respectively.
Item 8.01 Other Events.
On May 14, 2020, Discovery issued a press release announcing the expiration of
the cash tender offers (the "Any and All Offer") by DCL for any and all of its
outstanding 4.375% Senior Notes due 2021 (the "4.375% 2021 Notes"), 3.300%
Senior Notes due 2022 (the "3.300% 2022 Notes") and 3.500% Senior Notes due 2022
(the "3.500% 2022 Notes" and, together with the 4.375% 2021 Notes and the 3.300%
2022 Notes, the "Any and All Notes") at 5:00 p.m., New York City time, on
May 13, 2020 (the "Expiration Time"). As of the Expiration Time, according to
information provided by D.F. King & Co., Inc., the tender agent and information
agent for the Any and All Offer, (i) $304,717,000 of the 4.375% 2021 Notes, (ii)
$328,102,000 of the 3.300% 2022 Notes, and (iii) $292,560,000 of the 3.500% 2022
Notes had been validly tendered and delivered (and not validly withdrawn) in the
Any and All Offer. An additional $30,000 of the 3.300% 2022 Notes were validly
tendered and delivered (and not validly withdrawn) pursuant to guaranteed
delivery procedures.
DCL accepted for purchase all of the Any and All Notes validly tendered and
delivered (and not validly withdrawn) in the Any and All Offer at or prior to
the Expiration Time or pursuant to guaranteed delivery procedures. Payment for
the Any and All Notes purchased pursuant to the Any and All Offer was made on
May 18, 2020 (the "Settlement Date").
The applicable "Total Consideration" payable to holders is $1,034.21 for each
$1,000 principal amount of 4.375% 2021 Notes, $1,039.94 for each $1,000
principal amount of 3.300% 2022 Notes and $1,042.05 for each $1,000 principal
amount of 3.500% 2022 Notes, plus, in each case, accrued and unpaid interest on
the Any and All Notes validly tendered and accepted for purchase from the
applicable last interest payment date up to, but not including, the Settlement
Date, payable on the Settlement Date. The Any and All Offer was funded from the
net proceeds, from the issuance and sale by the DCL of the Notes described
above.
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The Any and All Offer was made on the terms and subject to the conditions set
forth in the offer to purchase and notice of guaranteed delivery that were sent
to registered holders of the Any and All Notes and posted online at
www.dfking.com/discovery.
A copy of Discovery's press release announcing the expiration of the Any and All
Offer is attached to this Current Report on Form 8-K as Exhibit 99.1 and is
incorporated herein by reference. The information contained in Item 8.01 of this
Current Report on Form 8-K and the press release attached hereto as Exhibit 99.1
are for information purposes only and do not constitute an offer to purchase the
Any and All Notes.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
4.1 Eighteenth Supplemental Indenture, dated as of May 18, 2020, among
Discovery Communications, LLC, Discovery, Inc., Scripps Networks
Interactive, Inc. and U.S. Bank National Association, as trustee
5.1 Opinion of Wilmer Cutler Pickering Hale and Dorr LLP
5.2 Opinion of Ice Miller LLP
23.1 Consent of Wilmer Cutler Pickering Hale and Dorr LLP (contained in
Exhibit 5.1)
23.2 Consent of Ice Miller LLP (contained in Exhibit 5.2)
99.1 Press release of Discovery, Inc., dated May 14, 2020
101 Inline XBRL Instance Document - the instance document does not appear in
the Interactive Date File because its XBRL tags are embedded within the
Inline XBRL document
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained
in Exhibit 101)
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