Six months since its last tapped the debt markets, DTH provider DirecTV has returned with a US$3bn three tranche senior unsecured bond offering.
The satellite broadcaster said that proceeds from the financing are to be used for general corporate…
Six months since its last tapped the debt markets, DTH provider DirecTV has returned with a US$3bn three tranche senior unsecured bond offering.
The satellite broadcaster said that proceeds from the financing are to be used for general corporate purposes, including the likely repayment of all of the US$1.22bn outstanding borrowings under the Term Loan A and B portions of its senior secured credit facility.
The new facility, which was issued via its subsidiary DirecTV Holdings, comprises a US$750m 5.5-year note, a US$1bn 10.5-year note and a US$1.25bn 30-year note. The 5.5-year note carries a coupon of 3.125% and priced at 99.935% of par to yield 3.138%. The 10.5-year note pays a coupon of 4.6% and priced at 99.934 to yield 4.608%, while the 30-year note pays a coupon of 6% and priced at 98.659 to yield 6.098%.
The notes, which are rated Baa2 by Moody’s, rank pari passu with the company’s existing senior unsecured notes and interest is to be paid semi-annually in August and February. The settlement date for the offering was August 17.
Joint bookrunning managers are Citigroup, JP Morgan, Credit Suisse and Goldman Sachs, while co-managers are Bank of America, Barclays Capital, Mitsubishi UJF, Morgan Stanley, UBS, Credit Agricole (USA), HSBC, ING, Lloyds TSB, Mizuho, RBS and US Bancorp Investments.
The transaction’s structure echoes the US$3bn three tranche senior unsecured bond offering that DirecTV raised back in March 2010, although the company has secured marginally better terms for this latest issue. That financing was split between a 5-year note paying 3.55%, a 10-year note paying 5.2% and a 30-year note paying 6.35%.
Proceeds from that offering were used to repay the outstanding US$978m of its Term Loan C portion of its senior secured credit facility.
Inks Google Ad deal DirecTV has signed a strategic partnership with internet giant Google in which the latter will become the sales representative for a broad selection of advertising inventory on several cable networks carried by the broadcaster.
Google will now offer its Google TV Ads system to a number of network channels including Bloomberg, Fox Business, Fit, Sleuth and Chiller. Google TV Ads is an online marketplace that enables any advertiser to buy national television advertising.
The advertiser can then measure its performance as Google signed a deal with Nielsen to provide audience data.
The service was initially rolled out via a number of US cable channels, such as Hallmark and History Channel, but truly gained scale when Google signed a deal with DirecTV’s DTH rival Dish Network around two years ago.
The partnership with both satellite broadcasters means that Google has access to approximately 30 million satellite households.
…Continues South American push Meanwhile, the satellite broadcaster is continuing to bolster its presence in the burgeoning Latin American DTH market by increasing its investment in Argentina and closing in on its takeover of Sky Brazil.
DirecTV recently announced that it intends to invest US$46m in Argentina throughout 2011 in order to both strengthen its core satellite DTH product as well as begin offering internet services.
The launch of DirecTV Net in Argentina aims to take advantage of the current spat between the Argentine government and Grupo Clarin’s Fibertel, the country’s largest ISP that has been temporarily shut down by the state, arguing its operating licence was invalid. DirecTV will beginning offering its service in the city of Mendoza in the west of the country The company is also planning to establish a production facility in Tierra del Fuego in the south of the country that will enable it to take advantage of certain tax incentive schemes.
At the same time, the acquisition of Brazilian communications group Globo Comunicacoes e Participacoes’ stake in Sky Brazil is close to taking place.
Back in June, Globo exercised its right to sell approximately 19% of its 26% stake in Sky Brazil to DirecTV. The sale is due to go ahead in second half of 2010 and DirecTV announced as part of its quarterly results that it had calculated a fair value for the stake of approximately US$500m to US$650m.
This will be paid either in DirecTV Class A common stock (at the weighted average price based on 20 consecutive trading days ending on the fifth trading day prior to the closing), in cash in the local currency or in a combination of the two, at the US company’s choosing.
On completion, DirecTV will own 93% of Sky Brazil with Globo the remaining 7%. The latter also retains the right to exchange all of its remaining equity interests in Sky Brazil.
