S&P: DirecTV unaffected

Standard & Poor's said its BB ratings and stable outlook on The DirecTV Group Inc. are not affected by the company's $1 billion share repurchase program.

The program, which will be funded out of the company's sizable cash balance, should not result in incremental debt, S&P said. The company has substantial liquidity from $2.2 billion of cash, pro forma for the acquisition of Darlene Investment's 14.1% stake in DirecTV Latin America and generated $1.2 billion of discretionary cash flow in 2006, the agency said.

However, the reduction in cash from the share repurchase will diminish the company's capability to address increased competition. S&P said its primary concern is DirecTV's inability to provide high-speed data, voice and advanced two-way video services presently available from cable TV companies and, to a lesser extent, the local telephone companies.

Consolidated total debt-to-EBITDA remains conservative at 1.0x for 2006, S&P added.

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