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Borrowings
 12 Months Ended
Jun. 30, 2022
Debt Disclosure [Abstract]  
Borrowings
NOTE 9. BORROWINGS
The Company’s total borrowings consist of the following:
Interest rate at June 30,
2022		Maturity at June 30,
2022		As of June 30, 2022As of June 30, 2021
(in millions)
News Corporation
2022 Term loan A3.529 %Mar 31, 2027500 — 
2022 Senior notes5.125 %Feb 15, 2032492 — 
2021 Senior notes3.875 %May 15, 2029987 985 
Foxtel Group (a)
2019 Credit facility (b)
4.11 %May 31, 202468 232 
2019 Term loan facility6.25 %Nov 22, 2024171 190 
2017 Working capital facility (b)
4.11 %May 31, 2024— — 
Telstra facility8.16 %Dec 22, 202790 60 
2012 US private placement—USD portion—tranche 2 (c)
4.27 %Jul 25, 2022198 202 
2012 US private placement—USD portion—tranche 3 (c)
4.42 %Jul 25, 2024147 152 
2012 US private placement—AUD portion7.04 %Jul 25, 202268 78 
REA Group (a)
2022 Credit facility - tranche 1 (d)
2.79 %Sep 16, 2024273 — 
2022 Credit facility - tranche 2 (d)
2.94 %Sep 16, 20258 — 
2021 Bridge facility — %Jul 31, 2022— 314 
Finance lease liabilitySee Note 1067 100 
Total borrowings3,069 2,313 
Less: current portion (e)
(293)(28)
Long-term borrowings
2,776 2,285 
________________________
(a)These borrowings were incurred by certain subsidiaries of NXE Australia Pty Limited (the “Foxtel Group” and together with such subsidiaries, the “Foxtel Debt Group”) and REA Group and certain of its subsidiaries (REA Group and certain of its subsidiaries, the “REA Debt Group”), consolidated but non wholly-owned subsidiaries of News Corp, and are only guaranteed by the Foxtel Group and REA Group and their respective subsidiaries, as applicable, and are non-recourse to News Corp.
(b)As of June 30, 2022, the Foxtel Debt Group had total undrawn commitments of A$539 million available under these facilities.
(c)The carrying values of the borrowings include any fair value adjustments related to the Company’s fair value hedges. See Note 11—Financial Instruments and Fair Value Measurements.
(d)As of June 30, 2022, REA Group had total undrawn commitments of A$187 million available under this facility.
(e)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.” $27 million and $28 million relates to the current portion of finance lease liabilities as of June 30, 2022 and 2021, respectively.
News Corporation Borrowings
Senior Notes
In February 2022, the Company issued $500 million of senior notes due 2032 (the “2022 Senior Notes” and, together with the Company’s senior notes due 2029, the “Senior Notes”). The 2022 Senior Notes bear interest at a fixed rate of 5.125% per annum,
payable in cash semi-annually on February 15 and August 15 of each year, commencing on August 15, 2022. The notes will mature on February 15, 2032.
The Senior Notes are the senior unsecured obligations of the Company and rank equally in right of payment with the Company’s existing and future senior debt, including the other Senior Notes and borrowings under its Term A and Revolving Facilities (as defined below). The Company may redeem all or a part of the Senior Notes upon payment of the redemption prices and applicable premiums, if any, set forth in the indenture governing the applicable Senior Notes (collectively the “Indentures”), plus any accrued and unpaid interest. In addition, at any time prior to specified dates in 2024 and 2025, the Company may redeem up to 40% of the aggregate principal amount of the applicable Senior Notes with the net cash proceeds of certain equity offerings at the redemption price set forth in the applicable Indenture, plus any accrued and unpaid interest. In the event of specified change in control events, the Company must offer to purchase the outstanding Senior Notes from the holders at a purchase price equal to 101% of the principal amount, plus any accrued and unpaid interest.
There are no financial maintenance covenants with respect to the Senior Notes. The Indentures contain other covenants that, among other things and subject to certain exceptions, (i) limit the Company’s ability and the ability of its subsidiaries to incur any liens securing indebtedness for borrowed money and (ii) limit the Company’s ability to consolidate or merge with or into another person or sell or otherwise dispose of all or substantially all of the assets of the Company and its subsidiaries (taken as a whole).
Term Loan A and Revolving Credit Facilities
On March 29, 2022, the Company terminated its existing unsecured $750 million revolving credit facility and entered into a new credit agreement (the “2022 Credit Agreement”) that provides for $1,250 million of unsecured credit facilities comprised of a $500 million unsecured term loan A credit facility (the “Term A Facility” and the loans under the Term A Facility are collectively referred to as “Term A Loans”) and a $750 million unsecured revolving credit facility (the “Revolving Facility” and, together with the Term A Facility, the “Facilities”) that can be used for general corporate purposes. The Revolving Facility has a sublimit of $100 million available for issuances of letters of credit. Under the 2022 Credit Agreement, the Company may request increases with respect to either Facility in an aggregate principal amount not to exceed $250 million.
The Term A Loans will amortize in equal quarterly installments in an aggregate annual amount equal to 0.0%, 2.5%, 2.5%, 5.0% and 5.0%, respectively, of the original principal amount of the Term A Facility for each 12-month period commencing on June 30, 2022. The loans under the Revolving Facility will not amortize. All outstanding amounts under the 2022 Credit Agreement with respect to the Facilities are due on March 31, 2027, unless earlier terminated in the circumstances set forth in the 2022 Credit Agreement. The Company may request that the maturity date of the Term A Facility be extended under certain circumstances as set forth in the 2022 Credit Agreement by at least one year. The Company may also request that the maturity date of the revolving credit commitments under the Revolving Facility be extended under certain circumstances as set forth in the 2022 Credit Agreement for up to two additional one-year periods.
Interest on borrowings is based on either (a) an Alternative Currency Term Rate formula, (b) a Term SOFR formula, (c) an Alternative Currency Daily Rate formula ((a) through (c) each, a “Relevant Rate”) or (d) the Base Rate formula, each as set forth in the 2022 Credit Agreement. The applicable margin for borrowings under the Facilities and the commitment fee for undrawn balances under the Revolving Facility are based on the pricing grid in the 2022 Credit Agreement, which varies based on the Company’s adjusted operating income net leverage ratio. At June 30, 2022, the Company was paying commitment fees of 0.20% on any undrawn balance under the Revolving Facility and, with respect to any outstanding borrowings under the Facilities, an applicable margin of 0.375% for a Base Rate borrowing and 1.375% for a Relevant Rate borrowing. The Company entered into an interest rate swap derivative to fix the floating rate interest component of its Term A Loans at 2.083%. Refer to Note 11—Financial Instruments and Fair Value Measurements for further detail.
The Company borrowed the full amount of the Term A Facility on March 31, 2022 and had not borrowed any funds under the Revolving Facility as of June 30, 2022.
The 2022 Credit Agreement contains certain customary affirmative and negative covenants and events of default with customary exceptions, including limitations on the ability of the Company and the Company’s subsidiaries to engage in transactions with affiliates, incur liens, merge into or consolidate with any other entity, incur subsidiary debt or dispose of all or substantially all of its assets or all or substantially all of the stock of all subsidiaries taken as a whole. In addition, the 2022 Credit Agreement requires the Company to maintain an adjusted operating income net leverage ratio of not more than 3.0 to 1.0, subject to certain adjustments following a material acquisition, and a net interest coverage ratio of not less than 3.0 to 1.0.
Foxtel Group Borrowings
The Foxtel Group has borrowings under the following facilities, as well as outstanding U.S. private placement senior unsecured notes:
•An A$610 million 2019 revolving credit facility and A$40 million 2017 working capital facility. Borrowings under these facilities bear interest at a floating rate of the Australian BBSY plus an applicable margin of between 2.00% and 3.25% per annum, depending on the Foxtel Debt Group’s net leverage ratio. The Foxtel Debt Group pays a commitment fee of 45% of the applicable margin for any undrawn amounts under these facilities.
•A fully drawn A$250 million term loan facility. Borrowings under this facility bear interest at a fixed rate of 6.25% per annum.
•An A$170 million subordinated shareholder loan facility with Telstra Corporation Limited (the “Telstra Facility”), which owns a 35% interest in the Foxtel Group. Borrowings under the Telstra Facility can be used to finance cable transmission costs due to Telstra under a services arrangement between the Foxtel Group and Telstra and bear interest at a variable rate of the Australian BBSY plus a margin of 7.75%. The terms of the Telstra Facility allow for the capitalization of accrued interest to the principal outstanding. The Company excludes borrowings under this facility from the Statements of Cash Flows as they are non-cash.
The agreements governing the Foxtel Debt Group’s external borrowings (revolving credit facilities, the term loan facility and the U.S. private placement senior unsecured notes) contain customary affirmative and negative covenants and events of default, with customary exceptions, including specified financial and non-financial covenants calculated in accordance with Australian International Financial Reporting Standards. Subject to certain exceptions, these covenants restrict or prohibit members of the Foxtel Debt Group from, among other things, undertaking certain transactions, disposing of certain properties or assets (including subsidiary stock), merging or consolidating with any other person, making financial accommodation available, giving guarantees, entering into certain other financing arrangements, creating or permitting certain liens, engaging in transactions with affiliates, making repayments of certain other loans and undergoing fundamental business changes. In addition, the agreements require the Foxtel Debt Group to maintain a ratio of net debt to Earnings Before Interest, Tax, Depreciation and Amortization (“EBITDA”), as adjusted under the applicable agreements, of not more than 3.25 to 1.0. The agreements also require the Foxtel Debt Group to maintain a net interest coverage ratio of not less than 3.5 to 1.0. There are no assets pledged as collateral for any of the borrowings.
REA Group Facilities
During the fiscal year ended June 30, 2022, REA Group completed a debt refinancing in which it repaid all amounts outstanding under its 2021 Bridge facility with the proceeds from a new A$600 million unsecured syndicated credit facility (the “2022 Credit Facility”) consisting of two sub-facilities: (i) a three year, A$400 million revolving loan facility (the “2022 Credit facility — tranche 1”) and (ii) a four year, A$200 million revolving loan facility (the “2022 Credit facility — tranche 2”). REA Group may request increases in the amount of the 2022 Credit Facility up to a maximum amount of A$500 million, subject to the terms and limitations set forth in the syndicated facility agreement.
Borrowings under the 2022 Credit facility — tranche 1 accrue interest at a rate of the Australian BBSY plus a margin of between 1.00% and 2.10%, depending on REA Group’s net leverage ratio. Borrowings under the 2022 Credit facility — tranche 2 accrue interest at a rate of the Australian BBSY plus a margin of between 1.15% and 2.25%, depending on REA Group’s net leverage ratio. Both tranches carry a commitment fee of 40% of the applicable margin on any undrawn balance.
The 2022 Credit Facility requires REA Group to maintain (i) a net leverage ratio of not more than 3.5 to 1.0 and (ii) an interest coverage ratio of not less than 3.0 to 1.0. The syndicated facility agreement also contains certain other customary affirmative and negative covenants and events of default. Subject to certain exceptions, these covenants restrict or prohibit REA Group and its subsidiaries from, among other things, incurring or guaranteeing debt, disposing of certain properties or assets, merging or consolidating with any other person, making financial accommodation available, entering into certain other financing arrangements, creating or permitting certain liens, engaging in non arms’ length transactions with affiliates, undergoing fundamental business changes and making restricted payments.
Covenants
The Company’s borrowings and those of its consolidated subsidiaries contain customary representations, covenants and events of default, including those discussed above. If any of the events of default occur and are not cured within applicable grace periods or
waived, any unpaid amounts under the applicable debt agreements may be declared immediately due and payable. The Company was in compliance with all such covenants at June 30, 2022.
Future maturities
The following table summarizes the Company’s debt maturities, excluding debt issuance costs and finance lease liabilities, as of June 30, 2022:
As of June 30, 2022
(in millions)
Fiscal 2023$271 
Fiscal 202481 
Fiscal 2025602 
Fiscal 202633 
Fiscal 2027450 
Thereafter
1,590