Bloomberg News

CBS Raises $900 Million at Its Lowest Coupons to Buy Back Bonds

June 11, 2012

CBS Corp. (CBS:US), the broadcaster and owner of the Showtime cable channel, raised $900 million in a two-part offering of five- and 30-year bonds at its lowest coupons on record to repay debt maturing in August.

The company sold $400 million of 1.95 percent five-year notes to yield 150 basis points more than similar-maturity Treasuries and $500 million of 4.85 percent 30-year bonds with a 230 basis-point spread, according to data compiled by Bloomberg. The coupons are the company’s lowest for similar-maturity issues, the data show.

The offering size is larger by $100 million and both spreads are lower than initial talk at about 175 basis points and 240 basis points more than Treasuries, according to a person familiar with the offering who asked not to be named, citing lack of authorization to speak publicly about the sale.

Proceeds from the sale will be used to repay about $152 million of 8.625 percent bonds due Aug. 1 and to redeem $338 million of 5.625 percent notes maturing two weeks later, the New York-based company said today in a regulatory filing. Remaining proceeds will be used to repay other debt and for general corporate purposes, the company said.

CBS last sold debt Feb. 24, when it issued $700 million of 3.375 percent debentures maturing in 2022 at 99.1 cents on the dollar to yield 150 basis points more than similar maturity Treasuries, according to data compiled by Bloomberg. That was the firm’s lowest coupon ever for 10-year debt, the data show.

The new bonds were rated Baa2 by Moody’s Investors Service, two levels above junk, and an equivalent BBB by Standard & Poor’s.

Citigroup Inc., JPMorgan Chase & Co., Morgan Stanley, Bank of America Corp., Deutsche Bank AG, Royal Bank of Scotland Group Plc and UBS AG managed the sale, according to the filing.

To contact the reporter on this story: Charles Mead in New York at cmead11@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net


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