Sky raises $600m. Why?

BSkyB is issuing a $600m (£400m) ten-year bond, at the fairly expensive rate of 9.53%, in order to fund “general corporate purposes”. The bond offering will wrap this time next week.

Sky is widely expected to use the cash to help fund a further move into the broadband telephony space. Two potential acquisitions are being highlighted. First, is a possible acquisition of broadband service provider Tiscali. Second, is picking up Carphone Warehouse’s virtual telco operation Talk Talk.

Sky’s statement says: “The company may use the net proceeds of the offering for the refinancing of existing debt and for acquisitions of business and/or assets in support of its strategy."