By Paul A. Harris
Portland, Ore., July 22 – DirecTV Entertainment Holdings LLC priced a downsized $2.3 billion issue of six-year senior secured notes (Ba3/BB/BBB-) at par to yield 5 7/8% on Thursday, according to market sources.
The issue size decreased from $3.1 billion.
The yield printed tight to yield talk in the 6% area. Earlier guidance was 6% to 6½%.
Credit Suisse Securities (USA) LLC was the left lead bookrunner. Joint bookrunners were BofA Securities Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., BMO Capital Markets Corp., Goldman Sachs & Co. LLC, Mizuho Securities USA Inc., MUFG, UBS Securities LLC, Barclays and Jefferies LLC.
The Dallas-based provider of digital video services, which is being spun off from AT&T, Inc., plans to use the proceeds plus a term facility to pay down, in cash, intracompany debt owed to AT&T, and to fund the reimbursement of certain financing expenses and shared transaction expenses immediately prior to closing the spinoff.
The notes are being issued by subsidiaries DirecTV Financing, LLC and DirecTV Financing Co-Obligor, Inc.
With the $800 million downsizing of the bond deal, a concurrent term loan increased by the same amount, to $3.9 billion from $3.1 billion.
| Issuers: | DirecTV Financing, LLC and DirecTV Financing Co-Obligor, Inc.
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| Amount: | $2.3 billion, decreased from $3.1 billion
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| Maturity: | Aug. 15, 2027
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| Securities: | Senior secured notes
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| Left bookrunner: | Credit Suisse Securities (USA) LLC
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| Joint bookrunners: | BofA Securities Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., BMO Capital Markets Corp., Goldman Sachs & Co. LLC, Mizuho Securities USA Inc., MUFG, UBS Securities LLC, Barclays and Jefferies LLC
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| Coupon: | 5 7/8%
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| Price: | Par
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| Yield: | 5 7/8%
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| Spread: | 499 bps
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| First call: | Aug. 15, 2023 at 104.406
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| Equity clawback: | 40% at 105.875 until Aug. 15, 2023
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| Trade date: | July 22
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| Settlement date: | Aug. 2
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| Ratings: | Moody's: Ba2
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| S&P: BB
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| Fitch: BBB-
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 6% area
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| Marketing: | Roadshow
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