Borrowings

3 Months Ended

Sep. 30, 2020

NOTE 5. BORROWINGS

The Company’s total borrowings consist of the following:


	Interest rate at September 30, 2020		Maturity at September 30, 2020	As of September 30, 2020		As of June 30, 2020
				(in millions)
Foxtel Group
Credit facility 2019(a) (c)	3.15	%	Nov 22, 2022	$	383	$	371
Term loan facility 2019(b)	6.25	%	Nov 22, 2024	176		171
Working capital facility 2017(a) (c)	3.15	%	Nov 22, 2022	—		—
Telstra Facility(d)	7.90	%	Dec 22, 2027	22		11
US private placement 2012 — USD portion — tranche 2(e)	4.27	%	Jul 25, 2022	197		200
US private placement 2012 — USD portion — tranche 3(e)	4.42	%	Jul 25, 2024	148		150
US private placement 2012 — AUD portion	7.04	%	Jul 25, 2022	74		73
REA Group
Credit facility 2018(f)	0.99	%	Apr 27, 2021	49		48
Credit facility 2019(g)	0.99	%	Dec 2, 2021	120		117
Credit facility 2020(h)	2.14	%	Dec 2, 2021	—		—
Finance lease and other liabilities				115		118
Total borrowings(i)				1,284		1,259
Less: current portion(j)				(78)		(76)
Long-term borrowings				$	1,206	$	1,183

(a)Borrowings under these facilities bear interest at a floating rate of the Australian BBSY plus an applicable margin of between 2.00% and 3.75% per annum depending on the Foxtel Debt Group’s (defined below) net leverage ratio.

(b)Borrowings under this facility bear interest at a fixed rate of 6.25% per annum.

(c)As of September 30, 2020, the Foxtel Debt Group had undrawn commitments of A$95 million under these facilities for which it pays a commitment fee of 45% of the applicable margin.

(d)Borrowings under this facility bear interest at a variable rate of Australian BBSY plus a margin of 7.75%. The Company excludes borrowings under this facility from the Statements of Cash Flows as they are non-cash.

(e)The carrying values of the borrowings include any fair value adjustments related to the Company’s fair value hedges. See Note 7—Financial Instruments and Fair Value Measurements.

(f)Borrowings under this facility bear interest at a floating rate of the Australian BBSY plus a margin of between 0.85% and 2.75% depending on REA Group’s net leverage ratio.

(g)Borrowings under this facility bear interest at a floating rate of the Australian BBSY plus a margin of between 0.85% and 2.00% depending on REA Group’s net leverage ratio.

(h)Borrowings under this facility bear interest at a floating rate of the Australian BBSY plus a margin of 2.00% or 2.75% depending on REA Group’s net leverage ratio.

(i)The Company’s outstanding borrowings as of September 30, 2020 were incurred by certain subsidiaries of NXE Australia Pty Limited (“Foxtel” and together with such subsidiaries, the “Foxtel Debt Group”) and by REA Group and certain of its subsidiaries. Foxtel and REA Group are consolidated but non wholly-owned subsidiaries of News Corp. These borrowings are only guaranteed by Foxtel and REA Group and certain of their respective subsidiaries, as applicable, and are non-recourse to News Corp.

(j)The Company classifies the current portion of long term debt as non-current liabilities on the Balance Sheets when it has the intent and ability to refinance the obligation on a long-term basis, in accordance with ASC 470-50 “Debt.” $28 million relates to the current portion of finance lease liabilities.

REA Group has access to an A$20 million overdraft facility (the “2020 Overdraft Facility”). The 2020 Overdraft Facility is an uncommitted facility that will be reviewed annually by the lender and bears interest at a rate based on the lender’s benchmark borrowing rate less a discount of 4.22%. The 2020 Overdraft Facility carries an annual facility fee of 0.15% of the A$20 million overdraft limit. As of September 30, 2020, REA Group had not borrowed any funds under the 2020 Overdraft Facility. In October 2020, REA Group amended certain terms of its credit facilities to, among other things, require REA Group to maintain a net leverage ratio of not more than 3.50 to 1.0 subsequent to December 31, 2020.

The Company has access to an unsecured $750 million revolving credit facility (the “2019 News Corp Credit Facility”) under the Company’s 2019 Credit Agreement (the “2019 Credit Agreement”) that can be used for general corporate purposes. The 2019 News Corp Credit Facility has a sublimit of $100 million available for issuances of letters of credit. The Company may request increases in the amount of the facility up to a maximum amount of $1 billion. The lenders’ commitments to make the 2019 News Corp Credit Facility available terminate on December 12, 2024, and the Company may request that the commitments be extended under certain circumstances for up to two additional one-year periods.

Interest on borrowings under the 2019 News Corp Credit Facility is based on either (a) a Eurodollar Rate formula or (b) the Base Rate formula, each as set forth in the 2019 Credit Agreement. The applicable margin and the commitment fee are based on the pricing grid in the 2019 Credit Agreement, which varies based on the Company’s adjusted operating income net leverage ratio. As of September 30, 2020, the Company was paying a commitment fee of 0.20% on any undrawn balance and an applicable margin of 0.375% for a Base Rate borrowing and 1.375% for a Eurodollar Rate borrowing. As of September 30, 2020, the Company had not borrowed any funds under the 2019 News Corp Credit Facility.

Covenants

The Company’s borrowings contain customary representations, covenants and events of default, including those discussed in the Company’s 2020 Form 10-K. If any of the events of default occur and are not cured within applicable grace periods or waived, any unpaid amounts under the Company’s debt agreements may be declared immediately due and payable. The Company was in compliance with all such covenants at September 30, 2020.