Satellite broadcaster DirecTV has hit the market with a US$4bn via a triple tranche bond offering.
The company, a perennial visitor to the US bond markets, issued US$1.5bn of 3.5% senior notes due March 2016, US$1.5bn of 5% senior notes due 2021 and…
Satellite broadcaster DirecTV has hit the market with a US$4bn via a triple tranche bond offering.
The company, a perennial visitor to the US bond markets, issued US$1.5bn of 3.5% senior notes due March 2016, US$1.5bn of 5% senior notes due 2021 and US$1bn of 6.375% senior notes due 2041.
Credit Suisse, Morgan Stanley, Barclays Capital, RBS and UBS are joint book-running managers on the transaction.
Proceeds from the unsecured notes, which are being co-issued by DirecTV Holdings and DirecTV Financing, are to be used for general corporate purposes and in particular to help fund the company’s share repurchase plan.
In recent years, share buybacks have been DirecTV’s main strategy in returning value to its shareholders. To that end, as part of in its full year 2011 results announcement, the company’s board authorised a new US$6bn repurchase plan for 2012.
The triple tranche transaction comes almost a year after DirecTV raised the same amount through a very similarly structured bond offering. In that financing, the DTH provider issued US$4bn of debt in 5-year, 10-year and 30-year senior secured bonds with the same respective coupons as the new issue. Again proceeds were used for general corporate purposes including share repurchases.
As of 31 December 2011, DirecTV had approximately US$10.472bn of outstanding bonds, just under US$5.449bn of which are due to mature between 2014 and 2016. The company also has a US$2bn five-year revolver which it secured in early February 2012.
According to data from Dealogic, the US$4bn financing was part of a record breaking Monday for the US bond markets with US$24.7bn aggregate of notes being issued from at least 18 borrowers. One banker explained that a surfeit of institutional investor liquidity has driven down yields in both the investment grade and high yield bond markets and that companies are seeking to take advantage of the demand to lock-in low rates and extend maturities.
