Twenty-First Century Fox 2014 Annual Report Download - page 114

TWENTY-FIRST CENTURY FOX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
108
Bank loans
In January 2013, Sky Deutschland, a majority owned subsidiary of the Company, entered into a credit
agreement, with major financial institutions, that 21st Century Fox America, Inc. (formerly known as News America
Incorporated) (“21CFA”), a wholly-owned subsidiary, and the Company have both guaranteed. The credit
agreement provides a €300 million unsecured credit facility with a sub-limit of €75 million revolving credit facility
available for cash drawdowns or the issuance of letters of credit and a maturity date of February 2018. Sky
Deutschland may request that the maturity date be extended for one year. The material terms of the agreement
include limitations on liens and indebtedness. Fees under the credit agreement are based on the Company’s long-
term senior unsecured non-credit enhanced debt ratings. Given the current debt ratings of the Company, Sky
Deutschland pays a facility fee of 0.125% and interest of Eurocurrency Rate plus 1.125%. As of June 30, 2014,
€225 million ($308 million) was outstanding under this credit agreement and €73 million was available for either
additional financing or letters of credit. The proceeds were used to repay existing Sky Deutschland debt. In fiscal
2014, Sky Deutschland amended its credit agreement to increase the size of its revolving credit facility by €78.5
million. Sky Deutschland intends to draw and utilize funds from the enhancement for the development of production
capabilities. If Sky Deutschland does not draw and utilize the funds by September 30, 2014, this amendment to the
credit agreement will be rescinded. The amendment did not materially change the terms of the original credit facility
entered into in January 2013.
In connection with the acquisition of the majority interest in the YES Network in February 2014, the
Company consolidated $1.1 billion, the aggregate outstanding under a term loan facility and a secured revolving
credit facility, collectively (the “YES Credit Agreement”), with a sub-limit available for the issuance of letters of
credit. The material terms of the YES Credit Agreement include various financial and restrictive covenants. The
YES Credit Agreement is collateralized by a substantial portion of the real and personal property assets of the YES
Network. At the election of the YES Network, the YES Credit Agreement bears interest at (i) one, two, three or six
month LIBOR plus the applicable LIBOR margin, or (ii) the Base Rate plus a Base Rate margin; margins reset
quarterly based on the specified leverage ratio of YES Network. The YES Network pays a facility fee of 0.50%.
Principal payments with respect to the term loan are required quarterly. Additionally, an annual excess cash flow
payment is required as mandatory prepayment of future amortization obligations, subject to certain leverage ratio
conditions. The YES Credit Agreement also provides for the establishment of additional credit facilities provided
certain terms and provisions are met. As of June 30, 2014, the outstanding balance on the term loan and secured
revolving credit facility was $1.07 billion and $60 million, respectively. The total amount available under the
secured revolving credit facility is $305 million.
Public debt - Predecessor indentures
These notes are issued under previous indentures, as supplemented, by and among 21CFA, the Company as
Parent Guarantor and the trustees. These notes are direct unsecured obligations of 21CFA and rank pari passu with
all other unsecured indebtedness of 21CFA. Redemption may occur, at the option of the holders, at 101% of the
principal plus an accrued interest amount in certain circumstances where a change of control is deemed to have
occurred. These notes are subject to certain covenants, which, among other things, restrict secured indebtedness to
10% of tangible assets and in certain circumstances limit new senior indebtedness.
Included in the predecessor indentures as of June 30, 2013 was A$150 million ($137 million) of 8.625%
Senior Notes which were retired in February 2014. The Company will not issue any new debt under the predecessor
indentures.
Public debt - Senior notes issued under August 2009 indenture
These notes are issued under the Amended and Restated Indenture dated as of August 25, 2009, as
supplemented, by and among 21CFA, the Company, as Parent Guarantor, and The Bank of New York Mellon, as
Trustee (the “2009 Indenture”). These notes are direct unsecured obligations of 21CFA and rank pari passu with all
other unsecured indebtedness of 21CFA. Redemption may occur, at the option of the holders, at 101% of the
principal plus an accrued interest amount in certain circumstances where a change of control is deemed to have
occurred. These notes are subject to certain covenants, which, among other things, limit the Company’s ability and