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DirecTV Sells Off Debt

California-based U.S. satellite TV giant DirecTV, sold $3 billion of 5-, 10- and 30-year notes, according to a report from Bloomberg earlier this week.

DirecTV offered $1.2 billion of 3.55 percent five-year notes which yield 120 basis points more than similar-maturity Treasuries, $1.3 billion of 5.2 percent 10-year debt that pays 150 basis points more than benchmarks, and $500 million of 6.35 percent 30-year obligations at a 167 basis-point spread according to Bloomberg.

For those interested, a basis point is 0.01 percentage point.

This is the first time DirecTV has issued corporate bonds says Bloomberg. The company may use some of the proceeds for a $3.5 billion share buyback aimed by the end of the year.

“We do think we are vastly undervalued,” said Jon Rubin, senior vice president of financial planning, in a March 8 conference call. “When we look at the expected growth rates for our business compared to others, you can see that in just about every category DirecTV is growing faster or is expected to grow faster than most of our competitors.”

Standard & Poor’s said Monday it affirmed all ratings, including the “BBB-” corporate credit rating for DirecTV.

The ratings firm also stated it assigned a “BBB-” rating to DirecTV Holdings LLC’s and DirecTV Financing Co.’s proposed senior unsecured notes due 2015, senior unsecured notes due 2020, and senior unsecured notes due 2040.

The company’s shares closed at $34.78, down 17 cents, in New York Stock Exchange composite trading on Monday.

The three part debt is rated Baa3 by Moody’s Investors Service and BBB- by Standard & Poor’s.

DirecTV offers service to more than 14 million subscribers in the continental US as well as the one million plus subscribers in Latin America. It remains the top ranking consumer satellite provider and continues to expand its offerings through high-definition and special interest packages such as NFL Sunday Ticket and Mobile programming.

Topics: DirecTV, General | Comments Off on DirecTV Sells Off Debt

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