Twenty-First Century Fox 2008 Annual Report Download - page 106

NEWSCORP
Notes to the Consolidated Financial Statements (continued)
The Company’s 7.375% Senior Notes due October 2008 in the amount of $200 million are due within the next twelve months and are classified
as current borrowings as of June 30, 2008.
(e) In February 2001, the Company issued Liquid Yield Option™ Notes (“LYONs”) which pay no interest and had an aggregate principal amount at
maturity of $1,515 million representing a yield of 3.5% per annum on the issue price. The remaining holders may exchange the notes at any time
into Class A Common Stock or, at the option of the Company, the cash equivalent thereof at a fixed exchange rate of 24.2966 shares of Class A
Common Stock per $1,000 note. The remaining LYONs are redeemable at the option of the holders on February 28, 2011 and February 28, 2016
at a price of $706.82 and $840.73, respectively. The Company, at its election, may satisfy the redemption amounts in cash, Class A Common
Stock or any combination thereof. The Company can redeem the notes in cash at any time at specified redemption amounts.
On February 28, 2006, 92% of the LYONs were redeemed for cash at the specified redemption amount of $594.25 per LYON. Accordingly, the
Company paid an aggregate of approximately $831 million to the holders of the LYONs that had exercised this redemption option. The pro-rata
portion of unamortized deferred financing costs relating to the redeemed LYONs approximating $13 million was recognized and included in
Other, net in the consolidated statements of operations for the fiscal year ended June 30, 2006.
The LYONs constitute senior indebtedness of NAI and rank equal in right of payment with all present and future senior indebtedness of NAI.
The Parent Guarantor has fully and unconditionally guaranteed the LYONs. The LYONs, which have been recorded at a discount, are being
accreted using the effective interest rate method.
(f) See Note 10—Exchangeable Securities
Ratings of Public Debt
The table below summarizes the Company’s credit ratings as of June 30, 2008.
Rating Agency Senior Debt Outlook
Moody’s Baa 1 Stable
Standard & Poor’s BBB+ Stable
Original Currencies of Borrowings
Borrowings are payable in the following currencies:
2008 2007
As of June 30, (in millions)
United States Dollars $13,341 $12,370
Australian Dollars 144 127
Other currencies 26 5
Total borrowings $ 13,511 $12,502
The impact of foreign currency movements on borrowings during the fiscal year ended June 30, 2008 was approximately $17 million.
In May 2007, NAI terminated its existing $1.75 billion Revolving Credit Agreement (the “Prior Credit Agreement”) and entered into a new credit
agreement (the “New Credit Agreement”), among NAI as Borrower, the Company as Parent Guarantor, the lenders named therein (the “Lenders”),
Citibank, N.A. as Administrative Agent and JPMorgan Chase Bank, N.A. as Syndication Agent. The New Credit Agreement consists of a $2.25 billion
five-year unsecured revolving credit facility with a sublimit of $600 million available for the issuance of letters of credit. Borrowings are in U.S.
dollars only, while letters of credit are issuable in U.S. dollars or Euros. The significant terms of the New Credit Agreement include, among others,
the requirement that the Company maintain specific leverage ratios and limitations on secured indebtedness. The Company pays a facility fee of
0.08% regardless of facility usage. The Company pays interest of a margin over LIBOR for borrowings and a letter of credit fee of 0.27%. The
Company is subject to additional fees of 0.05% if borrowings under the facility exceed 50% of the committed facility. The interest and fees are
based on the Company’s current debt rating. Under the New Credit Agreement, NAI may request an increase in the amount of the credit facility up
to a maximum amount of $2.5 billion. The New Credit Agreement is available for the general corporate purposes of NAI, the Company and its
subsidiaries. The maturity date is in May 2012; however, NAI may request that the Lenders’ commitments be renewed for up to two additional one
year periods. At June 30, 2008, no amounts were outstanding under the New Credit Agreement.
Note 10 EXCHANGEABLE SECURITIES
TOPrS
In November 1996, the Company, through a trust (the “Exchange Trust”) wholly-owned by NAI, issued 10 million 5% TOPrS for aggregate gross
proceeds of $1 billion. Such proceeds were invested in (i) preferred securities representing a beneficial interest of NAI’s 5% Subordinated Discount
Debentures due November 12, 2016 (the “Subordinated Debentures”) and (ii) 10,000,000 warrants to purchase from NAI ordinary shares of BSkyB
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