Shares in British Sky Broadcasting Group (BSkyB) fell slightly in early trading as it priced £3.25bn of euro and US dollar denominated bonds to help it buy Sky Italia and Sky Deutschland.
The deal will create "Sky Europe", a pan-European TV service, described by BSkyB as a "world-class, multinational pay TV business with enhanced headroom for growth and immediate benefits of scale".
Sky's gross debt, which stood at £2.6bn in June, will rise to £5.9bn as a result of the bond issue.
BSkyB announced in July that it will purchase 100 per cent of Sky Italia and 57.4 per cent of Sky Deutschland. The deal was expected to generate the capital needed for parent company 21st Century Fox's takeover bid of US media conglomerate Time Warner.
However, 21st Century Fox owner Rupert Murdoch ended his pursuit of Time Warner last month. He said: "the reaction in our share price since our proposal was made undervalues our stock and makes the transaction unattractive to Fox shareholders."
The bonds will be issued in four tranches in both Euros and US dollars. They comprise of:
- €1,500m senior unsecured notes, coupon of 1.500 per cent, due 2021.
- €1,000m senior unsecured notes, coupon of 2.500 per cent, due 2026.
- $750m senior unsecured notes, coupon of 2.625 per cent, due 2019.
- $1,250m senior unsecured notes, coupon of 3.750 per cent, due 2024.