Fox paid off its Roku bridge. The debt now runs as far as 2066.
A one-year funding deadline has disappeared. Seven bond issues replace it with payments stretching across several decades.
Fox has removed the one-year borrowing deadline hanging over part of its Roku acquisition. It repaid the entire $8.4 billion bridge loan on November 13, a week after completing the streaming deal.
Seven new bond issues replace the same $8.4 billion of bridge principal, with maturities from 2029 to 2066.
The new annual payment
Research by Ticker Byline shows that the new bonds carry approximately $545.5 million in annual interest payments, known as coupons. We calculated that amount by multiplying each issue's principal by its stated interest rate, then adding the seven payments.
| Maturity | Principal | Coupon |
|---|---|---|
| 2029 | $750 | 5.625% |
| 2031 | $1,500 | 5.900% |
| 2033 | $1,250 | 6.150% |
| 2036 | $1,750 | 6.400% |
| 2046 | $1,000 | 7.125% |
| 2056 | $1,500 | 7.150% |
| 2066 | $650 | 7.300% |
The average coupon is approximately 6.49%, weighted by the size of each issue. The $545.5 million figure measures a full year's interest on these new notes.
Fox received approximately $8.32 billion after underwriting discounts and estimated offering expenses. It combined those proceeds with existing cash to repay the $8.4 billion bridge.
A short deadline becomes a long commitment
At the Roku closing on November 6, Fox drew the bridge plus a separate $2 billion term loan. The bridge was designed to last 364 days. Replacing it quickly removes that particular refinancing task and spreads the new bond maturities over several decades.
The earliest $750 million issue falls due in November 2029. Another $650 million runs to November 2066. Longer terms give the combined business time to generate cash, while fixing coupon payments for the life of each issue.
Our earlier analysis of the Roku merger explains why the combined revenue illustration was larger while earnings per share were lower. Financing and acquisition accounting were important parts of that difference.
The operating work is still ahead
Fox expects about $400 million of annual cost savings within two years of closing and an increase in free cash flow per share by the second full year. The deal's cash return also depends on Roku's existing business, growth and the rest of the transaction's costs.
Fox has settled an immediate funding question. Whether the acquisition earns its cost will depend on the cash the enlarged business produces over time. The Fox company profile now records the completed refinancing alongside the acquisition and latest operating results.