Viacom Raises $750M in Debt Market

Two Bond Issues in Public Market from Media Giant

Viacom raised $750 million in debt through the sale of two bond issues in the public market Tuesday.

The company raised $500 million through the sale of notes due in 2017 on which it will pay 6.125% in annual interest and $250 million in notes that will be due in 2037 on which the company will pay an annual interest rate of 6.75%. The deal will close Oct. 5.

Viacom said it will use the cash proceeds from the transaction to pay down outstanding debt under its credit facility and commercial paper program.

Deutsche Bank was the lead manager of the offering with Greenwich Capital Markets acting as a co-lead.

Investors in corporate debt have become increasingly receptive to new deals in recent weeks, particularly for companies considered “investment-grade” such as Viacom (rated Baa3 by Moody’s Investor Service and BBB by Standard & Poor’s).

The subprime mortgage debacle rattled the market for corporate debt this summer, making it difficult for companies to refinance or raise cash for operations or acquisitions. The market for speculative-grade companies, commonly referred to as “junk,” was hit particularly bad, leaving a large queue of companies still waiting to tap the market, many tied to leveraged buyouts.